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China’s nuclear power development is still in a period of strategic opportunities

The proportion of electricity generation may quadruple in the next two decades.

"Going out" is meeting the opportunity of speeding up, private enterprises are involved in cracking down on financing obstacles

reporter: Wang Lu, Beijing
Reported Source: Economic Information Daily

Feb 6, 2018 - "The development is not balanced, but the market is still huge." Francois Morin, China Region Director of the World Nuclear Energy Association, described the current global market pattern of nuclear power during an interview with the Economic Information Daily reporter.

This is also the consensus of participants at the recent GNIS Nuclear Energy Investment Forum. In their view, the development of nuclear power in China is still in a period of strategic opportunities and will quadruple the proportion of generating capacity over the next 20 years. At present, it is also a good time to speed up the "going out" process. The first obstacle to be solved is financing. At present, the first private enterprise has emerged.

China's nuclear power is still ina period of strategic opportunities

Since the beginning of the first civil nuclear power in the Soviet Union in 1954, nuclear power in developed countries developed rapidly, especially in the 1960s and 1970s, but then two nuclear accidents in Three Mile Island and the Soviet Union Chernobyl slowed down the development of nuclear power in the world. With the oil price climbing up to more than 100 US dollars a barrel peak, the nuclear power development recoveries again. However, the accident of the Fukushima nuclear power plant in Japan led to the shadow rise again in 2011, and some countries and regions decided to abandon nuclear power, represented by Germany and Switzerland.

According to Yang Hanxin, PhD in the Department of Nuclear Energy Engineering at the University of Manchester in the UK, not only are the security issues behind the nuclear abandonment, but also factors such as a slowdown in energy demand and the impact of renewable energy. In fact, many countries, especially developing countries, now require massive power and are more pressing to develop nuclear energy.

Data shows that there are 448 nuclear power units operating in 31 countries around the world with a total installed capacity of 400 million kilowatts, accounting for about 10% of the world's power generation, peaked at 16% once. At the same time, until July 1, 2017, there are 59 nuclear power units under construction and 160 units under construction plans. The market size is close to 1.2 trillion U.S. dollars.

Francois Morin makes a more detailed analysis and description with a color map. It can be seen that 45 countries around the world are actively considering the development of nuclear energy projects such as Argentina, Belarus, Bangladesh, China, Brazil, Finland, Hungary, India, Iran, Pakistan, Romania, the United Kingdom, Russia, Slovakia, the United Arab Emirates and Turkey. It is estimated that by 2050, the world will add 1,000 GW of nuclear power installed capacity, being able to account for 25% of the total power generation.

China is considered to be one of the major forces in this. According to the "13th Five-Year Plan of China's Power Development", the installed nuclear power capacity in China will reach 58 million kilowatts in 2020, with a scale of more than 30 million kilowatts under construction. Data shows that until November 2017, China (excluding Taiwan) has put 37 nuclear power units into operation and 19 nuclear power units under construction. Nuclear power installed capacity ranked the4th in the world, electricity generation is more than Japan and has entered the top 3 in the world. Nuclear power units under construction has ranked 1st in the world for many years.

In the past year, China's "Nuclear Safety Law" was formally promulgated. The Interim Provisions on Securing Nuclear Safety Consumption were issued and the CDFBR construction has started. The unexpected result was that the eight units scheduled to start operation at the beginning of the year were still pending approval. The first reactor AP1000-Sanmen has failed to put into operation on time. It has not even complete the loading node.

XuYuming, deputy director of China Nuclear Industry Association Expert Committee, believes that China's nuclear power development is still in a period of strategic opportunities. He said that nuclear power is the only energy source that can replace coal on a large scale and to provide stable and reliable power for the grid. It is indispensable in the construction of China's green low-carbon energy system. At present, nuclear power has a very low proportion of installed capacity and power generation, and there is enough potential for capacity expansion. It is estimated that the installed capacity of nuclear power in China could reach 100 GW to 120 GW by 2030, accounting for about 8% of nuclear power generation. From 2040 onwards, China's installed nuclear power capacity will reach 150GW, accounting for nearly 11%, about the world average, that means more than quadrupling the current level.

However, it cannot be ignored that China's nuclear power development also faces many challenges, including issues of safety, economy, independent innovation, public understanding and support. The construction of the third generation nuclear power generally faces problems such as delay of the construction period and increase of construction cost. Moreover, the economic, power supply and demand relations have entered into a 'new normalcy'. The measures such as bidding for the Internet and limiting the amount of on-grid electricity have reduced the utilization hours of nuclear power equipment.

Speeding up the "going global" process based on “Belt and Road”

Compared with the "calmness" in the domestic market, "going global" for China's nuclear power is much more popular. The independent research and development of nuclear power technology based on "Hualong No.1" has become a national business card for the high-level active overseas promotion.

On November 21, 2017, CNNC signed the third overseas unit contract of "Hualong-1". Before, the first overseas Hualong 1 reactor-Pakistan Karachi Nuclear Power Project K2 has completed the dome-mounted installation and entered the equipment installation. On November 16 of the same year, CGNPC Hualong 1 reactor has formally entered the second phase of UK General Design Review. The British Bradwell Project B using Hualong1 technology has also entered the site exploration phase.

It is understood that CGNPC has signed memorandums of understanding or letter of cooperation with counterparts or government authorities from more than 20 countries such as the Czech Republic, Kenya and Thailand. CNNC also made substantial progress in the development of nuclear energy market with Argentina, Egypt, Saudi Arabia, Iran and other countries.

XuYuming said that China has built a comprehensive nuclear power industry system. Both the major equipment manufacturing capacity of nuclear power and the nuclear power construction capacity rank 1st in the world. There is a huge demand for developing nuclear power in the world. This makes a the very good opportunity for China nuclear to "going global".

Yang Hanxin also believes that unlike nuclear power development in other countries, China's nuclear power generation has been a continuous process of development over the past 30 years. It has abundant experience and has many advantages in terms of technology, capital, cost, duration, and policies.

In Francois Morin's opinion, the pace for China's nuclear power to go global cannot be slowed down. Countries along the "Belt and a Road" are the markets that should be explored. At the same time, some aging power plants will be retired and new reactors will be established in some countries and regions such as Western Europe, the United States and Japan. China has the opportunity and strength to develop these markets.

According to the International Atomic Energy Agency, about 130 new nuclear power plants will be built around the world by 2020, and this number will reach about 300 units by 2030. The countries along the Belt and Road and the neighboring countries will account for about 80% of the new units.

The first private enterprise to break through the financing obstacle

It is noteworthy that, despite the long-term and stable return on investment of nuclear power projects, the nuclear power project has the characteristics of high technology content, large capital investment and long return period on investment during landing. "The biggest obstacle to promoting nuclear energy at present is how to combine it with the green finance of the whole process," said Wei Jianguo, former vice minister of the Ministry of Commerce and vice chairman of China International Economic Exchange Center.

According to XuYuming, currently there are some private enterprises participating in the equipment part within China's entire nuclear power industrial chain but not yet in nuclear power plants. In building power plants, they are still mainly by CNNC, CGNPC and SNPTC. In terms of overseas mergers and acquisitions, Chinese enterprises come onto nuclear project investment late and the funding sources are mainly from policy-oriented financial institutions, lack of private sectors.

About Ocean Nuclear

Ocean Nuclear Co. Ltd. (referred to as Ocean Nuclear) which established in October 2017, intents to be the first private company to "eat crabs." According to Qiu Zhen, chairman of the board,living in the new era of energy, it is absolutely impossible to cover the needs for financing all new nuclear power projects and the upgrading of old equipment. It is particularly important to provide financing tools for nuclear projects to fill vacancies in free markets.

As a result, Ocean Nuclear is positioned as a global nuclear energy financial service provider, dedicated to providing total solutions for investing and financing of nuclear power projects and focusing on systematic services that provide capital for world energy projects. It is understood that on November 27, 2017, the company set up a branch in London to start the global nuclear power investment plan and is currently negotiating a small modular reactor project in the UK. It will also choose to open branches in France, South Africa and South Korea in the future.


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