x Abu Dhabi, UAEWednesday 24 January 2018

Asia powers on with its nuclear expansion

Competition on nuclear power is getting tough. South Korea has a 20-year plan to step up reactor sales, while China is moving to end its long reliance on coal.

When South Korea was selected late last year by the UAE Government to build four nuclear power stations, it represented the first time the north-east Asian nation had secured a contract to build reactors overseas. However, these four reactors, which propelled South Korea into the international nuclear power big league alongside France, the US, Japan, Canada and Russia, are just the beginning.

Soon after the consortium led by Korea Electric Power Corporation won the contract, South Korea's ministry of knowledge economy said the aim was for the country to sell 80 nuclear reactors abroad over the next two decades, giving the nation 20 per cent of the global market. South Korea is looking to countries such as Turkey, Indonesia, the US, Finland and China as possible markets. But securing contracts to build nuclear power plants is set to get tougher, not least because of competition from China. China has embarked on an ambitious domestic nuclear power building project, and on the back of this, the country's nuclear technology firms and suppliers are becoming more ambitious internationally.

In July, China began commissioning its 12th nuclear reactor, its first domestic CPR-1000 facility, a Chinese model based on a tried-and-tested French design. Twenty-four more nuclear reactors are being built on the mainland to accommodate rapidly increasing energy demands. China says it will have 80 gigawatts of installed nuclear power generating capacity by 2020, requiring nearly 30 more plants than are currently operating, making China second in the world only to the US in its capacity to produce electricity from nuclear power. China wants 200gw of nuclear generating capacity by 2030.

That would represent a significant feat for a country that only began generating electricity from nuclear power in 1991 - 13 years after the South Koreans - but one that is necessary if China is to end its reliance on coal-fired power stations. Coal provides China with 80 per cent of its power, but has helped make it the world's largest greenhouse gas producer. The continued building of coal-fired power stations is part of the reason China's carbon dioxide emissions are expected to grow nearly 3 per cent annually over the next two decades.

"Coal-fired power stations also make heavy demands on the supply of coal. Many of the coal fields are really being heavily exploited and the national transport system is tied up with coal capacity to a large extent. That's a problem," says Professor CF Lee of the University of Hong Kong, one of China's leading nuclear power specialists, who has many years of experience working in the Canadian nuclear industry.

"For a nation as large as China, having a good mix of different sources of energy supply does make sense. You shouldn't put all your eggs in one basket. "The country is moving in the direction of low-carbon supply, which doesn't favour coal-fired power. Nuclear [power] probably isn't a bad choice if we address the safety issues. Probably having 10 per cent from nuclear is not unreasonable." As well as partly satisfying the country's growing power requirements, China's nuclear expansion also aims to give a boost to Chinese suppliers. While the UAE is using overseas contractors to both build and operate its plants, China is aiming for self-sufficiency when it comes to nuclear power reactor design and construction, although at present it remains heavily dependent on partnerships with foreign companies.

China's intention to localise supply is illustrated by what is happening at the CPR-1000 reactor that recently began commissioning in southern China's Guangdong province, and which will start commercial electricity production in October. The plant, officially known as unit one of Ling Ao Phase II, has more than 50 per cent local content. But the second unit alongside it, scheduled to start producing power next year, is more than 70 per cent locally produced.

The nuclear reactors built in China up to now have been based on a variety of designs originating in several countries. One key partner has been the US company Westinghouse, which is supplying technology for the UAE's forthcoming reactors. Four years ago, China chose Westinghouse to build a series of advanced third-generation AP1000 reactors, reportedly in part because the American company was prepared to transfer ownership of much of the technology to China. Similarly, the French company Areva, an unsuccessful bidder for the UAE project, has in recent years won contracts in China to build EPR nuclear power plants, another third-generation design, after striking deals over technology transfer.

There are hurdles for China to overcome however before it becomes one of the world's top nuclear suppliers. Although the country is building advanced third-generation reactors, in the near term its nuclear programme is primarily centred on having more CPR-1000 reactors, known as "second generation plus", which use well-proven technology but are less cutting-edge. The international rights to CPR-1000 technology are owned by Areva, and experts believe the French company would be unlikely to allow China to sell its own plants of this design overseas, since they would be competing for contracts with Areva's own bids.

By contrast, South Korea's efforts at developing its own nuclear technology mean it will soon be in a position to sell advanced reactors overseas that do not rely on foreign technology. Also, there have been quality control issues raised over some of the components produced by a Chinese supplier for the AP1000 reactors - South Korean-made parts had to be used instead - indicating China has progress to make before it can compete with the world's best.

But despite such hurdles, Prof Lee believes it is "only a question of time" before the world's most populous nation becomes a global supplier of nuclear technology. Already China has built reactors in Pakistan, and earlier this year plans for more were announced. "There's no question that [South] Korea was ahead of China in the nuclear power game, but Korea didn't develop their own reactors," he says, adding that the country relied on Canadian designs.

"It took them a couple of decades to get the formulas with their own technology, and now they're exporting to the Middle East. It's a good example - you acquire, you learn from operation, and you gradually design, build and export. China is gradually moving in the same direction." @Email:business@thenational.ae