China's nuclear power prospects

I have been giving some thought to China’s nuclear power development prospects and plans. It seems to me that there are some aspects that might be worth discussing.

The publicly announced plans to build 30-50 new plants during the next 15 years are pretty well known, but there are some undercurrents that lead me to believe that there are a lot of aspects of the development that may surprise some people. It has been often repeated that the next big step in that process will be the awarding of a large, four reactor project worth more than $8 billion. The conventional wisdom is that the next step for China is to settle on a single, third generation design large reactor in the 1000-1600 MW class.

All of the major suppliers including Areva, Westinghouse, AtomStroyExport, have been working for several years to land this tantalizing contract, but the selection keeps getting pushed into the future. According to a number of different sources, there are ongoing price and technology transfer negotiations. Here is one story with recent status on this project – China Still Reviewing Nuclear Reactor Bids -Government Official

China has internal options. Though the designs being considered for this major contract award may be a bit more sophisticated, China has built its own 300 MWe power plants both at home and for export. It is quite possible that refinements of this design could lead to a large and growing domestic manufacturing base that would reduce the need and interest in importing reactor components and designs.

After all, a 1200 MWe power plant can certainly be replaced by four plants each generating 300 MWe. In countries with difficult and time consuming permitting processes, designers have calculated that it is more cost effective to plan for a smaller number of larger facilities. That way, the investment made in the permitting and licensing process can be repaid by larger power sales. In a large, less litigious country with diverse needs and limited transmission capacity it could make far more sense to built lots of smaller plants and apply the benefits of series production and learning curves.

I also cannot forget about the fact that Tsinghua University is still operating the world’s only existing pebble bed reactor. The HTR-10 has now been producing power for the grid, undergoing testing, and providing daily bits of information for its operators for about half a dozen years. There are not too many reports available and there has been little publicity about the next step. My interpretation of that situation is that things are progressing rather nicely and that there will soon be additional refined, somewhat larger versions of the system in operation.

Based on knowing a few Chinese people and having read a fair amount of Chinese history, my conclusion is that they have a long term and patient view and care far more about making substantive progress than about making public relations driven statements. It is unlikely that the pebble bed reactor program there is experiencing the shifting priorities that have been frustrating people associated with DOE nuclear research programs.

I guess my bottom line here is a warning to any colleagues that are hanging their careers on the possibility of making big money by selling nuclear power plants or their components to China. The opportunity may be a lot smaller than you imagine, and you might find yourself engaged in many power plant project battles with Chinese suppliers as peer competitors.

If things continue as they are now, you might find that you will be trying to sell unproven third generation plants in a market where customers have access to refined and proven Gen IV systems from capable, experienced Chinese suppliers. Those Gen IV systems could be built here, with a little foresight and support, but it is unlikely in a market where established suppliers and conventional designs automatically jump to the front of the line for the limited attention of regulators and investors.