November 16, 2007
ABSTRACT
– With 1.3 billion people China
is the most populous country in the world and has a fast growing economy. In
the last ten years, China’s G.D.P. has grown almost with a two digit rate
every year. In order to support this dynamic economy, China requires always additional
quantities of electric energy. The aim of this paper is to analyze the actual
Chinese development with reference to civil nuclear energy and to explain that
an important drive toward an increase of nuclear energy is mandatory for China
if the country wants to continue to sustain its economic growth. In particular,
it is of clear evidence that all the other sources of energy cannot provide a
reliable support for this country, which now has the fourth largest economy in
the world (when measured by nominal G.D.P.) and which is predicted to surpass
Germany at the beginning of 2008 becoming the third largest economy.
Introduction
– Since the last
couple of years it has emerged a trend toward a sort of nuclear
renaissance all around the world. According to the International Energy Agency (I.E.A.)
in 2005 "5.2 percent of the world's electricity was produced by nuclear
plants, compared with 3.3 percent in 1973."[i]
In
particular, this trend is principally centered on Europe and on Asia. In the
latter, China, India and Russia are undertaking important programs with the aim
of building new nuclear reactors in order to increase their nuclear civil
capacities. In addition to this, "they are making nuclear energy available
to other nations"[ii]
and they are trying to develop a new generation of nuclear power plants. In
fact, despite a recent increase also in renewable energy sources, like wind and
waves power, these account for only a very low percentage of energy generation
and cannot guarantee the economic development of any developing country. The
tendency to expand nuclear energy is driven by the necessity to have always
more and more available energy. In specific, if China and India want to
continue in the next decades with the incredible economic growth that they have
sustained in the last years, they have to increase the quantity of available
energy given their increasing energy demand. In general, the following three
big issues contribute together to the advancement of the development of civil
nuclear energy:
- First, the rising prices of commodities. A barrel of oil is around $90 in November 2007.
- Second, if, on the one hand, oil and gas create problems linked to the high prices, on the other hand, they are found in the so-called “difficult countries” like Persian Gulf states, Russia, countries previously belonging to the Soviet Union, Angola, Nigeria and Venezuela; just to mention the principal owners of oil and gas. On the contrary, uranium is located principally in friendly places like Australia and Canada, which are very stable politically.
- Third, there exist environmental concerns linked to the fact that the other principal alternatives to nuclear energy, for instance oil and coal, are without any doubt dirtier. Nuclear power-plants are considered in China clean sources of energy — this obviously putting aside the problem of how storing the spent fuel that notwithstanding years of study still persists.
The aim of this paper is to try to
photograph the actual Chinese situation with reference to civil nuclear energy
and to show that if China wants to continue with its impressive economic growth
an increase in the production of civil nuclear energy is a very mandatory step.
1. China’s Energy Panorama —
It
is a matter of fact that China's very rapid economic development has been
accompanied by an increase in energy demand. From the beginning of 1990s the
Chinese primary energy consumption has risen by more than 70 percent. This
increase is mainly due to low energy efficiency and to an impressive economic
growth. From one side, it should be noted that according to the Asian
Development Bank (A.D.B.), China “uses four times the amount of energy to produce a unit
of G.D.P. than the Group of Seven developed countries”[iii].
On the other side, in comparison with Western countries the per-capita consumption is very low with
a huge difference between coastal and rural areas[iv]. There is already a tendency to increase the per-capita consumption and this is
linked first and foremost to the urbanization and motorization of large groups
of Chinese population. The People’s Republic of China is the world’s most
populous country (1.3 billion of people) and today it is the second energy
consumer behind the United States. Given these two considerations, it is
understandable how China’s rising oil demand and oil imports have turned the
country into a very important player in world oil markets. The essential
dependence on conventional fossil fuels — principally coal and oil, but also
natural gas — have already created huge environmental problems at the domestic
level, with a very dramatic increase of greenhouse gases. China is today the
largest producer and consumer of coal in the world (and it is presumed that
China has large coal reserves to be developed yet). In light of the high
consumption of coal (probably the most pollutant way to generate electric
energy), it is really plausible that in 2008 China will overtake the United
States as the world’s largest emitter of carbon dioxide. China also produces a
high amount of oil (3,858 thousand barrels per day, 5th producer in
the world). In fact, the country has sizeable proven oil reserves. Its most important producing oil
fields are mature and production has already peaked, so now the attention is
devoted to the internal western provinces and to offshore fields where it seems
to be 20.5 billion tons of oil reserves of which 9 billion tons already proven[v].
One
relevant issue that contributes to raise problems for the Chinese energy
production is the distribution of the domestic energy commodities. In fact,
coal and natural gas are located principally in western provinces while
hydropower in the southwest. Oil is instead located offshore in the Bohai Sea
in the northern part of the country where there are 28 oilfields and 60
platforms[vi].
Energy demand is high in the eastern part of the country along the coast
(provinces of Guangdong, Zhejiang and Jiangsu, cities like Shanghai, Beijing
and Tianjin). It is of public evidence that in recent years during peak seasons
many Chinese coastal areas have sustained severe blackouts. The Chinese
government in the last years started to take some actions in order to
improve energy efficiency and to push for the development of the so-called
clean energies in which it included nuclear energy. According to this target,
the present 11th Five-Year Plan (2006-11) states that China has to
reduce energy consumption by 20 percent of its G.D.P. by 2010 and to increase the share
of renewable energies up to 15 percent of the energy portfolio. Chinese energy
development pushes also for a fivefold increase of its nuclear capacity by 2020.
And the share of nuclear energy will pass from the actual 2 percent to 4 percent. Compared to some Western countries
where the share of nuclear energy is around 15 percent to 25 percent (apart
from the 70 percent of France)[vii]
this value is still not very high, but considering the huge dimensions of the
country it means that by 2020 China will build up at least 30 new nuclear power
plants with an investment of $50 billion. In any case, China is already the
third biggest nuclear energy producer in Asia after Japan and South Korea and
nuclear power is in China the third most-important way in order to generate
electricity after coal and hydropower[viii].
2.
China’s Nuclear Energy Program and the Related Institutions — China considers nuclear energy
to be part of the group of the so-called clean sources of energy. For this
reason, in all the international negotiations China has always pushed for the
inclusion of nuclear energy into the Clean Development Mechanism (C.D.M.)[ix].
Its civil nuclear program started in the 1980s. At that time it was first designed
and then constructed a 300 MW pressured water reactor (PWR) 100 km southwest of
Shanghai, in Zhejiang Province. Then followed the two units, Daya Bay 1 and
2 (with French and Canadian technology), which are located near Hong Kong (70
percent of their power is transmitted to Hong Kong, while the remaining 30
percent goes to Guangdong Province). These three first nuclear power plants
started their commercial operability in 1994. Up to the late 1990s, the
development of the Chinese nuclear energy had been very slow. One of the
reasons was the Asian financial crisis in 1997. In other words,
projects already prepared were put on hold because the economic panorama was
not very clear and big investments could be unsafe and not pay back. With the
10th Five-Year Economic Plan (2001-05) the development of nuclear
energy was set up again as one priority and in the last seven years eight
nuclear plants have been added to the national power grid. Four of these new
power plants are located in Zhejiang Province, two in Guangdong Province and
two in Jiangsu Province. All these new power plants are situated along the
coastline in the eastern part of the country and have the task of providing electric
energy to the most developed part of the country.
Then, according
to the 11th Five-Year Economic Plan (2006-11), while China necessarily wants to develop its nuclear power, it now also deems important
to start setting up some environmental goals in order to gain always more and
more energy efficiency while protecting the environment. Today, China has ten
nuclear reactors in commercial operation while unit Tianwan 2 is already
connected to the electric grid but it is not commercially active. Four
additional units are now under construction while the building of four other
units will start by the end of this year. In 2007, the Chinese State Council
has approved a plan to increase fivefold the Chinese nuclear capacity by 2020. Instead,
by this year, China should be capable of generating units by a total of 23
million kilowatts. If China accomplishes this result by 2020, it will have a
total of 40 million kilowatts through nuclear power[x].
Then, in the following decade there will be a three-to-fourfold additional
increase in the Chinese civil nuclear power to 120-160 GWe. The country also
wants to acquire the necessary know-how to design and build nuclear reactors, as
well as to master all the aspects related to the fuel cycle[xi].
In fact, at the moment eight out of the eleven existing nuclear power plants have
to import their most important components from France, Canada or Russia. China
is now conducting experimental work with reference to develop its
fourth-generation pebble-bed high-temperature reactor. The Chinese plan is to
become independent of foreign conventional fission technology and by 2017 to
build up its first pressurized water reactor in operation. The running projects
are nonetheless linked to foreign technologies, in particular with the United
States and Russia. In 2006, China and the United States signed an agreement
that would permit to Westinghouse Electric Co. to build four nuclear reactors in
China. According to this contract, Westinghouse AP1000 (third generation
nuclear technology reactor) will be used for four reactors two in Sanmen
(Zhejiang) and two in Yangjiang (Guangdong)[xii].
Today there are more than 300 international companies (from Canada, France,
Germany, Japan, Russia, Spain and the United States) that are providing
technologies and/or know-how to the Chinese nuclear industry.
In
China, the National Development and Reform Commission (N.R.D.C.) decides the
targets for energy development and approves all the projects related to nuclear
energy. Then, the China Atomic Energy Authority (C.A.E.A.) is in charge of all
civil nuclear energy programs and international cooperation. It is the key body
for planning and managing civil nuclear energy and for approving all the
feasibility studies. With reference to the safety regulations and their
compatibility with international agreements the leading center is the National
Nuclear Safety Administration (N.N.S.A.), which was created in 1984, at the
beginning of the Chinese nuclear energy program. The State Environmental
Protection Administration (S.E.P.A.) and the Chinese Environmental Ministry
monitor radioactive pollution and also waste management. Several corporations
are working in the nuclear field. Among them, the most important is the China
National Nuclear Corporation (C.N.N.C.), which was created in 1988. It is
involved with research and development, uranium exploration and mining, uranium
enrichment, fuel reprocessing and disposal. This state conglomerate for nuclear
power produced 22.68 billion kilowatt-hour of electricity in 2006 and has
operated very safely Qinshan-1 nuclear power plant for 15 years. Last, China
Nuclear Engineering and Construction (C.N.E.C.) is responsible for the
construction of nuclear plants.
3. What
Considerations Can Be Drawn in Relation to the Chinese Nuclear Program?
The
trend for China in order increase its nuclear power is totally reasonable.
Three are the most pressing contingencies:
- Environmental concerns
- Commodities prices (oil and gas)
- Political instability in the countries where the commodities are located
Summing
up, all of these contingencies are pushing China to expand strongly its nuclear
civil power. In the past decade, China although it has ratified the Kyoto Protocol, it has seen a massive increase in its domestic greenhouse emissions. The difficult environmental
situation derives from a high utilization of coal. In fact, in China there are
hundreds of coal-fired power plants often very old and absolutely not environmentally
friendly. In 2005, China built 117 government-approved coal-fired power plants.
In addition to these power plants, local and provincial governments built other
non-authorized coal-fired power plants. According to the International Energy
Agency (I.E.A.)[xiii], five Chinese cities are among the top 10 most-polluted
cities in the world and this is directly linked to coal-fired power
plants. The effect of this massive use
of coal is already easily visible in the short run. In fact, today one-third of
the Chinese territory receives acid falls and one-third of the urban population
breathes heavily polluted air. The Chinese power sector is the main responsible
for this situation. It releases in the air around 44 percent of sulfur dioxide,
80 percent of nitrous oxide emissions and 26 percent of carbon dioxide. It is a
matter of fact that China has to decarbonize its power-generating structure. It
is not a question of not being able to comply with the Kyoto Protocol, the environmental
problem is real. And for China, pushing only on economic growth without
considering the devastating environmental impact may also have negative
economic result. In fact, the environmental problems may also slow down the
economic growth of the country.[xiv]
With
reference to the prices of commodities the problem lies principally with oil. An
oil barrel priced over $90 is a huge cost on an economy that is developing so strongly
like the Chinese economy. In October 2007, the country’s energy officials had a
meeting “with OPEC officials for the first formal meeting in two years”.[xv]
According to Chinese policymakers, for China the problem is not anymore how to find
crude. China in the last years has put into action a very strategic network of
agreements with countries in all the continents in order not to incur in any
oil shortage (many agreements have been signed with African countries and in
specific with Angola). Instead, the problem for China lies in the price of oil,
which is definitely too high (China has access to oil but this is very
expensive). If Chinese industries falter, given the lack of broad resources of
cheap oil, this could slow the economic growth depressing the financial
markets. This event could really undermine the expansion of the Chinese middle class “and could drive the economy into a prolonged slowdown”[xvi]
with problems spreading all around the world.
In
addition to the previous two points, it is true that oil and gas are located
principally in difficult areas of the world, areas politically unstable like the
Middle East, Venezuela and Russia. Instead, nuclear power plants require
uranium that is to be found in friendly, stable and democratic countries like Australia
and Canada[xvii].
Also on the uranium side, Chinese officials have moved very diplomatically in the
recent years. Premier Wen Jiabao has been traveling the world to secure
contracts for the uranium needed to power nuclear reactors. At this regard, in
2006, China reached an agreement with Australia. The latter had to procure uranium to China on condition
that China would not use it for military purposes. Still in 2006, China and
Canada signed agreements in Beijing to develop uranium mines and oil reserves.[xviii]
In addition to these agreements, China signed a deal also with Niger. The only
problem linked to uranium is that — given all these activities on the
international markets — the price of uranium is rising. In December 2000,
according to UX Consulting[xix],
a U.S. firm that publishes benchmark uranium prices, one pound (about 454 grams ) of uranium was
$7.1, while in November 2007 it is now more than $90. In general, there exists the
possibility that China’s shift to nuclear energy will push up the price of
uranium on the international market.
4.
Conclusions — Given all the factual conditions it is
absolutely normal and plausible an increase of the utilization of nuclear
energy in China. Beijing has to work a lot to improve the efficiency of the
energy it produces with all the different energy sources that it currently uses,
but nuclear energy is the only viable solution, especially with reference to
the huge environmental problems linked to pollution, which China is already
facing (the main reason are all its coal-fired nuclear plants). At the same
time, it is true that nuclear energy should not be considered as completely clean,
because still persists the problem associated with the spent fuel. In order to
try to solve this problem, China is organizing in the desert of Central Asia a
storage point (a sort of Yucca Mountain in the United States). The Beishan
Mountains — this is the name of the Chinese storage place — “are a lonely
outpost, with the closest permanent residents more than 60 miles away. The only
people who venture here are nomadic Mongolian herdsmen with goats and camels.
They move from one small oasis to another in what is otherwise a desolate, gray
desert for hundreds of miles around.”[xx]
This project is still to be developed and at the moment China is testing the
area in order to understand whether these mountains could have the prerequisite to
store nuclear spent fuel. What is already sure is that in China the development
of nuclear energy has undoubtedly more pros than cons and it is very obvious that
the Chinese government will speed up this process more and more in the next
years.
[i]In: http://www.economist.com/daily/chartgallery/displaystory.cfm?story_id=10125475, accessed November 15, 2007
[ii]In: http://www.larouchepub.com/eiw/public/2007/2007_20-29/2007-21/pdf/39-45_21_nuclear.pdf, accessed November 13, 2007.
[iii]
WISE/NIRS Nuclear Monitor, Development of
Civil Nuclear Power Industry in China in Antenna 10, http://www10.antenna.nl/wise/index.html?http://www10.antenna.nl/wise/655/5799.php,
accessed November 15, 2007
[iv]
A Chinese citizen consumes only one-eighth of the consumption of an American
citizen.
[v]In:
http://www.chinadaily.com.cn/english/doc/2004-12/23/content_402814.htm, accessed November 15, 2007.
[vi]“CNOOC Ltd, China's biggest offshore oil
producer, plans to more than double production at the Bohai Bay field to more
than 27 million metric tons, or about 542,000 barrels a day, in five to six
years as new fields come on stream”. In: http://news.xinhuanet.com/english/2007-10/16/content_6889074.htm,
accessed November 15, 2007.
[vii]“Of
the 30 countries with nuclear power, the percentage of electricity supplied by
nuclear ranged widely: from a high of 78 percent in France; to 54 percent in
Belgium; 39 percent in Republic of Korea; 37 percent in Switzerland; 30 percent
in Japan; 19 percent in the USA; 16 percent in Russia; 4 percent in South
Africa; and 2 percent in China”. in Nuclear
Power Worldwide: Status and Outlook, in
http://www.sciencedaily.com/releases/2007/10/071023103052.htm,
accessed November 16 2007. Nine countries in the world get 40% or more of their
electricity through nuclear power but normally worldwide nuclear power supplies
only 17% of the total.
[ix]
The Clean
Development Mechanism (C.D.M.)
is an arrangement under the Kyoto Protocol allowing industrialized countries
with a greenhouse gas reduction commitment (called Annex 1 countries) to invest
in projects that reduce emissions in developing countries as an alternative to
more expensive emission reductions in their own countries. The most important
factor of a carbon project is that it establishes that it would not have occurred
without the additional incentive provided by emission reductions credits.
[x]
If China reaches this target, it will produce 260-280 billion kilowatt per hour
in 2020.
[xi] In: http://www.lnoppen.com/download/lnc84.pdf, accessed November 13, 2007. In addition, “China Zhejiang Province Shandong Province China China
has recently been involved in the construction of a smaller nuclear plant in Pakistan
[xii]In:
http://www.china-embassy.org/eng/xw/t295611.htm,
accessed November 16 2007. This is probably the reason for which the Japanese
industry Toshiba in 2006 spent $5.4 billion to acquire Westinghouse Electric.
The idea is that China
[xiv]SAIGET,
R., J., China’s Coal Addiction Causing
Environmental Disaster, in Agence
France Presse, in http://www.terradaily.com/reports/China_Coal_Addiction_Causing_Environmental_Disaster_999.html,
accessed November 16, 2007.
[xv]REUTERS,
Oil Prices Are Too High, China Tells OPEC,
in International Herald Tribune, http://www.iht.com/articles/2007/10/24/business/opec.php,
accessed November 16, 2007.
[xvi]McINTYRE,
D., A., China Oil Crisis Could Cripple World Economy, in 247Wallst, http://www.247wallst.com/2007/11/china-oil-crisi.html,
accessed November 16 2007.
[xvii]
China has its own uranium
resources in western China
[xviii]DELANEY,
R., McKINNON, I., China, Canada Agrees On
Oil, Uranium Development, in From The Wilderness, http://www.fromthewilderness.com/free/ww3/012705_china_canada.shtml,
accessed November 16, 2007.
[xix]UXC: http://www.uxc.com,
accessed November 16, 2007.
BIBLIOGRAPHY
- CHA, A., E., China Embraces Nuclear Future, in Washington Post, May 29 2007
- DELANEY, R., McKINNON, I., China, Canada Agrees On Oil, Uranium Development, in From the Wilderness, http://www.fromthewilderness.com/free/ww3/012705_china_canada.shtml
- McINTYRE, D., A., China Oil Crisis Could Cripple World Economy, in 247wallst, http://www.247wallst.com/2007/11/china-oil-crisi.html
- SCIENCE DAILY, Nuclear Power Worldwide: Status and Outlook, in Science Daily, http://www.sciencedaily.com/releases/2007/10/071023103052.htm
- REUTERS, Oil Prices Are Too High, China Tells OPEC, in International Herald Tribune, http://www.iht.com/articles/2007/10/24/business/opec.php
- SAIGET, R., J., China’s Coal Addiction Causing Environmental Disaster, in Agence France Presse, in http://www.terradaily.com/reports/China_Coal_Addiction_Causing_Environmental_Disaster_999.html
- WISE/NIRS Nuclear Monitor, Development of Civil Nuclear Power Industry in China in 10.antenna, http://www10.antenna.nl/wise/index.html?http://www10.antenna.nl/wise/655/5799.php
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