China - Nuclear EnergyChina – Nuclear Energy
Nuclear Electricity Generation
Nuclear Energy Supply Shares (%)
Source: World Nuclear Association
China remains a massive market for U.S. companies involved in all aspects of nuclear power development. As of December 2016, China had 34 operational nuclear power reactors and 21 reactors under construction (the largest number of nuclear builds of any country in the world). The total installed capacity was 33.6 GW. In 2016, seven new reactors were connected to the grid, and nuclear power accounted for about 3.56 percent of the country's electric generating capacity. The Chinese Government is actively promoting nuclear energy as a clean, efficient, and reliable source of electricity generation. As such, nuclear power is on pace to grow substantially to 58 GWe by 2020 and 150 GWe by 2030. During China’s 13th Five-Year Plan period (2016 to 2020), six to eight new nuclear units will be built every year.
The Chinese Government forecasts it will invest more than 1.2 trillion RMB (180 billion USD) in China’s nuclear industry within the 13th Five-Year Plan period. Much of this investment will come from the construction of new nuclear sites and from the development of more advanced designs. Whereas most plants currently in operation have a production capacity of 2 GW, the vast majority of reactors currently under construction are using more advanced designs. The designs most favored in current construction plans are the CPR-1000 and the American-designed AP1000 generators, which have a production capacity of around 1.25 GW. With respect to the AP1000, this imported design is forming the basis of China’s move towards 3rd generation nuclear technology. Given the successful final performance testing of the coolant pumps of the first four builds of the AP1000s in China, it is anticipated that the AP1000 program will experience significant additional construction in the coming years.
In addition to the growth of the AP1000 reactor program, China’s own indigenously designed reactors are making progress. Building off of foreign technology and original research, China has developed its own third generation reactors. The advanced reactors, Hualong-1, CAP1400, and a high-temperature gas-cooled reactor design (HTR), are expected to enter international markets in the coming decade. China’s “One Belt, One Road” strategy is intended to shape global economic integration and trade by Chinese terms, and will likely support advancement of nuclear power technology as one of China’s new high-tech export brands.
Foreign competition for access to the Chinese market is high, and China has become increasingly self-sufficient for its nuclear power technology needs, which will limit U.S. content in future reactor builds. However, ample opportunities exist for U.S. industry, including fuel cycle, nuclear components, and services related to nuclear power in China.
While China recognizes the need to import foreign technology, it also wants to localize as much of this technology as possible and will continue to demand full technology transfer and localization whenever possible. As a result, many U.S. power equipment manufacturers and related construction and engineering firms have formed joint-ventures in this market. The country’s energy policy states that domestic manufacturing of plants and equipment will be maximized.
China also intends to build strategic and commercial uranium stockpiles through overseas purchases, and it continues to develop domestic production. The country is also in the process of developing nuclear fuel reprocessing facilities that are expected to come online by 2017. China has become largely self-sufficient in reactor design and construction, as well as other aspects of the fuel cycle, but it has done so by adapting and improving upon western technology.
In contrast to the situation in much of the rest of the world, China’s regulatory environment is relatively supportive of nuclear development. The Chinese Government has a strong interest in diversifying the country’s energy supply and in promoting the cleaner production of energy. Looking to the next five years, China is in a good position to meet its commitments under the Paris Agreement on Climate Change, which China signed in December 2015. Under the 13th Five-Year Plan, the country’s leaders committed themselves to several ambitious targets including a 15 percent reduction in energy and carbon intensity and a 15 percent share of non-fossil fuel in the energy mix by 2020. Given these regulatory incentives, it seems that China will continue to support the development of the nuclear industry in the future.
The Fukushima Daiichi reactor incident event had a heavy impact on the advancement of the nuclear power industry, stalling the approval process for all new nuclear sites and mandating an immediate safety review for all existing nuclear facilities. In addition, the Chinese Government committed itself to the development of a new safety plan and improved regulatory oversight of the industry.
To this end, the government released the “Nuclear Safety Radioactive Pollution Prevention Five-Year Plan and Vision for 2020”, which seeks to belay concerns that China will forego safety procedures as it seeks to rapidly develop its nuclear industry. This plan, which was developed by the National Energy Administration, places a far more rigorous set of safety criteria upon each stage of nuclear development. In addition, it calls for the deployment of more advanced nuclear technology and better safety management systems to minimize future risks.
Given the enormous growth in the Chinese nuclear industry, foreign companies looking to conduct business in the local market have several avenues to explore. As development of new nuclear plants continues, surveying, construction, and construction equipment services will be in high demand. Furthermore, as domestic energy firms look to improve reactor design, U.S. companies with a specialty in advanced reactor technologies have opportunities to cooperate in reactor production.
China is also looking to move towards the construction of more Fast Neutron Reactors (FNR). Beyond standard technologies, Chinese firms are also eager to explore alternative nuclear reactor designs including “pebble bed reactors” and “molten salt reactors.” China is following international trends and is working to develop and deploy Small Modular Reactor (SMR) technology, and the Chinese Government is providing significant financial support for these efforts.
In the wake of the Fukushima Daiichi nuclear disaster, efforts have been focused on improving safety standards across the industry. China currently operates several types of nuclear reactors using multiple technologies, making safety management a significant challenge. The Ministry of Environmental Protection (MEP) has suggested that China may have to spend as much as $13 billion to achieve 3rd generation safety standards across all of its existing plants, since China will only be approving 3rd generation projects over the next five years. Given this expected outlay, U.S. companies with significant experience in nuclear safety management, retrofits, and extensive upgrade technology will have significant opportunities in China over the next few years.
Running the world’s largest new build program safely and successfully continues to require significant investment in areas including:
- Services (front-end and back-end): Opportunities for probabilistic risk assessment and regulatory advisory services.
- Licensing Support: Opportunities to support China’s National Nuclear Safety Administration (NNSA).
- Design, Construction, and Operations: Significant opportunities for new nuclear plant construction.
- Components: The interim portion of the NPP supply chain represents the largest current opportunity for U.S. exporters. Under China’s mammoth nuclear energy expansion, China is building plants of two basic types. The first are Generation II reactors based on technology already mastered by Chinese domestic producers. The second are Generation III reactors, for which China is still largely dependent on foreign suppliers. Currently, China plans to manufacture 50-60 percent of the units domestically based on the older Generation II technology, leaving 40-50 percent of the market for Generation III nuclear equipment imports, an estimated $15 billion in market value. In the downstream market, similar to the interim market, the quality of products produced by most Chinese domestic manufacturers does not meet the demand of Chinese buyers. The best prospects for U.S. exporters in the downstream market are nuclear pumps and valves, breakers, large forging parts, and other accessories.
- Fuel Management: China is not fully self-sufficient in the upstream market of raw materials used in nuclear power plants. Chinese mines produce 70 percent of the uranium used in Chinese reactors. Chinese imports of U.S. graphite moderator rods recently increased, and this market is now the third largest buyer after Japan and Canada of U.S. graphite. China intends to become self-sufficient in most aspects of the nuclear fuel cycle, which will limit opportunities for foreign exporters. However, the country still relies on foreign suppliers for all stages of the fuel cycle, from uranium mining through fabrication and reprocessing. As China rapidly increases the number of new reactors, it has initiated a number of domestic projects, often in cooperation with foreign suppliers, to meet its nuclear fuel needs. Local content requirements are a key barrier for U.S. civil nuclear exports. Although there is strong foreign competition, the size of China’s market is so large and the industry is developing so rapidly that China will remain a strong market for U.S. exports for years to come in all areas of the civil nuclear supply chain.
- Waste Management: Mid- and low-level waste processing continues to be an area of relative weakness for Chinese firms. China National Nuclear Corporation (CNNC) and Candu Energy renewed a strategic agreement in 2014 to develop uranium-recycling technology at the Qinshan pressurized heavy water reactor, and both companies have been in discussions over mining and the potential addition of an Advanced Fuel CANDU Reactor (AFCR) to China’s existing fleet. Spent fuel storage issues are also a large challenge, as China has yet to designate a dry spent fuel repository.
The 2nd World Nuclear Energy Development Exhibition and Forum
Dates: April 26-28, 2017
Venue: Radisson Blu Hotel Beijing
The 15th China International Nuclear Industry Exhibition
Dates: April, 2018
Venue: China National Convention Center, Beijing
China Atomic Energy Authority
National Energy Administration
National Nuclear Safety Administration
State-owned Assets Supervision & Administration Commission
State Nuclear Power Technology Corporation –
China National Nuclear Corporation
China General Nuclear Power Group
China Power Investment Corporation
Civil Nuclear Trade Advisory Committee
Civil Nuclear Guide to Exporting
World Nuclear Association
U.S. Commercial Service Contact for Nuclear Energy Sector
Helen (Haiyan) Hua, Haiyan.firstname.lastname@example.org
T: +86 28-8598-6738
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China Civil Nuclear Power Trade Development and Promotion