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China Nuclear Delivered

Nuclear News Weekly Roundup – 01/15 - 01/19

Multiple Key Components Installed at Fuqing Unit 5

On January 15th, following the introduction of each of Fuqing Unit 5’s three steam generators, each of the three RCP cases were also hoisted into position. The first two RCP cases were put into place on December 10th, 2017, and January 14th, 2018 respectively, with the following installed on the 15th. On the afternoon of January 19th, the conventional island (CI) turbine generator stator was installed. The stator is the heaviest component within the CI hall and one of the key components of the turbine generator. The stator was manufactured by Dongfang Electric Machinery Company.


“Nuclear Power Equipment On-line Monitoring and Intelligent Diagnosis Laboratory” Established at SNPI

The unveiling ceremony of the “Nuclear Power Equipment On-line Monitoring and Intelligent Diagnosis Laboratory” was held at Suzhou Nuclear Power Institute (SNPI) on January 12th. The lab is affiliated with the Ministry of Science and Technology’s State Nuclear Power Plant Safety and Security Engineering Technology Research Center at SNPI. Ningde NPP, Harbin Engineering University, and North China Electric Power University are all co-founders of the lab. The lab will run new algorithms using big data derived from operational NPPS to provide intelligent monitoring services for fleet units. Following the unveiling ceremony, Unit 1 of Ling’ao phase II and Ningde Unit 1 will become the pilot units used to build intelligent monitoring models.


Nuclear News Weekly Roundup – 01/08 - 01/12

Xi and Macron Attend the Nameplate Unveiling Ceremony for Taishan Unit 1, the World’s First EPR Unit

On the afternoon of January 9th, 2018, Chinese President Xi Jinping and French President Emmanuel Macron unveiled the nameplate of Taishan Unit 1, as the world’s first EPR (European Pressurized Reactor), at the Great Hall of the People in Beijing. Taishan Unit 1 began construction in 2009 and Unit 2 poured its “first concrete” in 2010. They were, at the time, the third and fourth EPR units to begin construction in the world. Taishan NPP is constructed and operated by Taishan Nuclear Power Joint Venture Company Limited (TNPC), a joint venture owned by CGN, EDF, and Guangdong Yudean Group. It is the largest Sino-French energy cooperation project.


All Three Steam Generators in Place at Fuqing HPR1000 Unit

On January 7th, the third steam generator of Fuqing Unit 5 was successfully topped off. With the completion of the installation, all three HPR1000 demonstration project’s steam generators are now in place. The third steam generator was introduced onto the NI’s 16.5 m platform on December 28th, 2017, and was prepared for installation during the ten days following. The installation began at 8:00 am, January 7th, 2018. The steam generator was then turned and placed upright, had its clasp buckles removed, accessories installed, and was finally topped off on the vertical stands.


Fangchenggang Unit 3’s Personnel Airlock Shipped to Site

The first personnel airlock module of CGN’s HRP1000 demonstration project was shipped from Dalian Baoyuan Nuclear Equipment Co., Ltd. on January 5th. It lays a solid foundation for subsequent installation of the containment dome. The personnel airlock will be placed on the platform, which is elevated +1.20m, inside the containment building. It allows passage of personnel and small equipment without breaking the seal of the containment building during plant operation or hot shutdown.


Qinshan NPP’s First Outage in 2018 Completed

Fangjiashan Unit 2 successfully resumed grid connection at 2:18 pm on January 4th, marking the completion of its third refueling outage. The outage, which began in 2017, was Qinshan’s seventh outage, and the first of this year. The outage lasted for 33.9 days after the unit was taken off-line from the eastern China power grid on December 1st, 2017, and was finished 4.1 days ahead of the original schedule.


Nuclear News Weekly Roundup – 01/01 - 01/05

Prestress Platform of World’s First HPR1000 Delivered to Fuqing NPP

The prestress platform for Fuqing Unit 5 was delivered on January 2nd. It paves the way for subsequent work such as installation and commissioning. The prestress engineering needs to meet the functional requirements for the tendons, tensioning and grouting. The engineers must also manage their work within the limited space inside the containment shell, and complete the complex tasks while avoiding contact with the other equipment already installed. The prestress platform is the most optimized of its type within China’s nuclear industry in terms of size, extent of integration, and convenience of engineering operations. It increases the efficiency of the prestress engineering operations and lowers its impact on other ongoing engineering operations.


Manufacturing of Xudapu Phase I’s Mechanical Modules Begins

The opening ceremony for Xudapu NPP Phase I’s mechanical module manufacturing project was recently held within the 1st Work Division of Dalian Shipbuilding Industry Company (DSIC, a subsidiary of China Shipbuilding Industry Corporation). This is the first nuclear safety-grade equipment manufacturing project awarded to DSIC after receiving its HAF 601 nuclear safety certification. The project will result in 90 mechanical modules to be used at Xudapu Units 1&2, which are built by China Nuclear Power Engineering Company (CNPE). There are 14 nuclear safety-grade modules, including one nuclear Safety-Class 1 component. Some of the primary components include structural frames, piping, cable conduits, air ducts, valves, pressure vessels, etc., weighing a total of approximately 900 tons. The largest module, designated as “Q601” (a safety-class 1 module), has a size of 4709 X 5137 X 9763 mm and weighs 55 tons by itself.


Tianwan Unit 3 Successfully Connected to the Grid

On December 30th, 2017, the generator circuit breaker for Tianwan Unit 3 was officially switched on, marking the unit’s first successful connection to the grid. This is the ninth time CNPE has served as an EPC contractor for an NPP that has been fully built and connected to the grid. Tianwan Unit 3 uses Russian VVER 1000 / 428 PWR technology, which was permitted as China’s “NPP icebreaker” after the Fukushima accident. The reactor design was contracted to Atomstroyexport, Russia’s nuclear power equipment and service exporter. CNPE served as the CI and BOP designer and EPC contractor, while CNNC’s Jiangsu Nuclear Power Company performed the commissioning work.


China’s First Gen IV Fast Reactor Quietly Pours First Concrete – First and Only FCD of 2017

On December 29th, CNNC published the news on its company website that its sodium-cooled fast reactor pilot project in Xiapu, Fujian Province, began construction earlier that day. It was the only nuclear project initiated in 2017, as well as the first since 2015. According to CNNC, the fast reactor project is a key part of China’s “Three-step Strategy” for nuclear power development, which includes constructing thermal neutron reactors, fast breeder reactors, and finally controlled fission reactors.


Nuclear News Weekly Roundup – 12/11 - 12/15

The Bradwell B Project Begins Geological Survey for NPP Site

On December 11th, the Bradwell B (BRB) project, where China’s HPR1000 export in Britain will be built, began its geological survey for the NPP site. It is the first on-site “ground work” of the project and an important step toward formal construction. According to Mr. Zhen Dongshan, General Manager of CGN’s project companies in Britain, primary work at this stage is to obtain field data for seismic analysis, including measurements of seismic refraction, microseism, seismic reflection, resistivity, etc. The BRB site is located on the Essex coast near London and is close to the Bradwell A NPP which is under decommissioning.


Key Installation Milestones Reached for HPR1000s at Fuqing NPP

First commissioning task for Fuqing Unit 5 was completed on the afternoon of December 12th. It marks that Fuqing Unit 5 is now at the stage of comprehensive commissioning. The first commissioning is the “TP7LBO12 direct current switchboard logic simulation test,” simulating various fault scenarios to verify their respective alarm signals. Engineers from CNNC’s China Nuclear Power Engineering Corporation (CNPEC) conducted the commissioning.

As of mid-December, the HPR1000s at Fuqing NPP have progressed smoothly. Fuqing Unit 5 accomplished successful installation of the first RCP’s pump shell, and Fuqing Unit 6 has completed civil construction on the reactor building internal silo.


New Development on the Sanming NPP in Fujian Province

On December 8th, Wang Chaoteng, Vice GM of Sanming Nuclear Power Co., Ltd, and Xiao Yuqin, Deputy County Mayor of Jiangle Country, signed the Strategic Cooperation Framework between Sanming Nuclear Power Company and Jaingle County Government together. The framework states that both sides will promote the Sanming NPP project as well as the economic development in Jiangle County; they will also commit to environmental protection, NPP site protection, public education campaign, and information exchange with local residents.


2018 Shanghai Direct Electricity Sales Plan Released, 1 Billion kWh Quota for Nuclear Power

Last Thursday (December 14th), the Shanghai Development and Reform Commission, the Shanghai Municipal Commission of Economy and Informatization, and East China Energy Regulatory Bureau of National Energy Administration jointly released the 2018 Direct Electricity Sales Work Plan for Electricity Customers and Power Generation Enterprises in Shanghai. The plan estimates that approximately 15-billion kWh’s amount of power will be sold in Shanghai’s direct electricity sales market next year. Nuclear Power Qinshan Joint Operation Company and Qinshan Third Nuclear Power Company, Qinshan Phase II & III’s operator and owners, will have a quota of 1-billion kWh’s amount of power in the electricity market. Nuclear power is still a small share of the market comparing to the 15-billion kWh amount designated to China Yangzi Power, a subsidiary of China Three Gorges Corporation and a hydropower utility. The primary trading mechanisms include annual bilateral negotiation, annual listed trading, and annual centralized auction. Mid-term or short-term trades will also be performed based on real-time market demand.


Nuclear News Weekly Roundup – 12/04 - 12/08

No. 1 Steam Generator of the World’s First HPR1000 Installed at Fuqing Unit 5

On November 28th, the first steam generator (ZH-65) was successfully installed at Fuqing Unit 5. The steam generator is indigenously designed and developed by Nuclear Power Institute of China (NPIC). The successful installation hits a new milestone for primary equipment installation and paves the way for subsequent work.


China’s First Gen III NPP May Begin Commercial Operation Next Year

State Power Investment Corporation (SPIC) had its first Open House day last week in Beijing. The corporation in charge of the AP1000 technical transfer said that Sanmen Unit 1, China’s first Gen III NPP, is in the final pre-fueling preparation stage and will hopefully begin commercial operation next year. As of the end of this month, China has 56 nuclear power units in total, 37 of which are in operation. Among the 19 units under construction, there are four AP1000s. The indigenously developed CAP1400 demonstration project is also in the works. The CAP1400 project is one of the 16 National Science and Technology Major Projects. A single CAP1400 unit can generate 11.4 billion kWh worth of power annually, while the NPP and its primary equipment have a designated service life of 60 years. The CAP1400 is much safer than older generation nuclear technologies. The passive safety design assures a 72-hour non-interference safe period following a power outage.


CGN Looks to Opt Out of Direct Electricity Sales Market in Guangdong Next Year

The Government of Guangdong Province announced in August that nuclear power will take part in electricity sales through market-based mechanisms in 2018. China General Nuclear, China’s nuclear power magnet and the owner of all NPPs in Guangdong Province, said this month that it would rather not immediately participate in the newly reformed market. CGN is proposing an alternative plan instead by which it will surrender a portion of profit to the government in return for guaranteed fixed price & volume of grid-connection power. Experts comment that it is a reasonable move for CGN to act in such a conservative manner. However, Guangdong has great electricity demand, and the market mechanism there is relatively transparent and well enforced. Therefore, CGN could totally figure out a profitable price in the market given its negotiating power in the province of its base camp. At this point, the proposed plan is negotiated by concerned parties and it is unclear whether it will be accepted or not.

Nuclear News Weekly Roundup – 11/27 - 12/01

Key Installation Milestones Reached for China’s HPR1000 Builds

On November 28th, the steam generator of Fuqing Unit 5, the world’s first HPR1000, was lowered into the equipment room. After being maneuvered through the 16.5m2 gantry platform on November 10th, it was unpacked and equipped with lifting components. It was fully lifted and ready to be installed after 18 days of preparation. As a primary equipment of the NI, the steam generator having completed the preparation work for installation is a significant developmental marker of the project. It also paves the way for subsequent work, like welding of the primary pipes.

For China’s international HPR1000 build in Pakistan, a welding machine officially went to work at Karachi Unit 2’s NI plant hall on November 23rd local time. It took 53 minutes and 56 seconds to finish the backing weld, marking the beginning of the primary pipe welding of China’s first HPR1000 export, at Karachi. The K-2 project is built by China Nuclear Industry Fifth Construction Co., Ltd, a subsidiary of CNNC. K-2 is also the first among all the HPR1000 projects under construction around the globe to start primary pipe welding.


China’s First Nuclear Generator Renovation Design Passed Assessment Inspection

Shanghai Electric has recently organized an assessment and inspection conference for the renovation design of the No.1 generator at Qinshan Unit 1. The expert panel comments that “the renovation design and update plan will realize the purpose of capacity increase and life extension. The renovated generator will perform well, have a reliable structure, and allow for convenient operation and maintenance. The design surpasses requirements and standards in both domestic and international markets.” Qinshan NPP is the first nuclear plant in China that was indigenously designed, developed, constructed, and operated. The main generator is a 310MW double inner water-cooled turbo-generator produced by Shanghai Electric Machine Corporation, which was originally designed for 30 years’ usage. It has been operated smoothly and steadily for over 25 years since the NPP was connected to the grid on December 15th, 1991.


First Marine Nuclear Power Platform Will Start Construction Soon

The 2017 Annual Conference of Hubei Province’s Shipping and Marine Engineering Equipment Academician Work Center was held in Wuhan on November 26th. It was announced during the meeting that the marine nuclear power platform, a part of the shipping and marine engineering equipment major project within Hubei Province’s “Thirteenth Five-year Plan,” is about to start construction following the imminent completion of its design work. The first platform is expected to begin operations prior to 2020. A marine nuclear power platform is a small NPP on the sea, which could either be floating or submersible. It will power off-shore oil-drilling platforms as well as facilities on islands and reefs, and become an important part of China’s territorial water infrastructure.


Test of First DN450 Explosion Valve for CAP1400 A Success

The DN450 explosion valve, which will be used in the CAP1400 demonstration unit, passed the hot opening testing on November 22nd. It marks the CAP explosion valve series has passed inspection, and signifies that the indigenous development and manufacture work was successful. The explosion valve testing was run at SPIC’s Central Research Institute. The prototype was jointly developed and manufactured by Shanghai Nuclear Engineering Research and Design Institute, Dalian DV Valve Corporation, and Haitian Group in Sichuan.


CNNC Released “Yanlong,” a Self-developed Low Temperature Heating Reactor

Concluding on November 28th, a pool-style light-water reactor – part of the demonstration heating reactor project – was safely operated for 168 hours, and successfully provided heating for the China Institute of Atomic Energy complex, comprising a total area of about 10000 m2. CNNC released Yanlong, the self-developed pool-style low temperature heating reactor, in Beijing on the same day. Yanlong also has the codename of “DHR-400” because it is a 400MW district heating reactor. According to CNNC, a 400MW Yanlong reactor is able to heat up an area of 20 million square meters, an equivalent of two hundred thousand 3-bedroom apartments.


University of Chinese Academy of Sciences Establishes New School of Nuclear Science &Technology

Approved by the Chinese Academy of Sciences (CAS), the University of Chinese Academy of Sciences (UCAS) is establishing a new School of Nuclear Science and Technology for both teaching and research purposes. The school building is led by a joint force of CAS’ Institute of Modern Physics (Lanzhou), Institute of High Energy Physics (Beijing), Shanghai Institute of Applied Physics, and Institute of Theoretical Physics (Beijing). The unveiling ceremony of the new school was held at UCAS on November 29th in Beijing.

Nuclear News Weekly Roundup – 11/20 - 11/24

Contract Signed for Third HPR1000 Export

On November 21st, the contract for Chashma Unit 5 (aka the C-5 project) was signed between Wang Shoujun, chairman of China National Nuclear Corporation (CNNC), and Muhammad Naeem, chairman of Pakistan Atomic Energy Commission (PAEC). The contract specifies that CNNC will build an HPR1000 unit with a capacity of at least 1 GWe for Chashma NPP. It will be the third HPR1000 to be exported, following the two units currently under construction in Karachi (K2 and K3). Chashma Unit 5 will be the seventh reactor unit that China exports to Pakistan.


Haiyang Unit 2’s RCPs Installation Complete, Jogged Successfully

The four RCPs of Haiyang Unit 2, the AP1000 project, were successfully jogged for the first time on November 18th. At this point, all of the RCPs of the two AP1000 projects at Sanmen and Haiyang are ready to operate. Completion of this step lays the foundation for the next steps in the commissioning process: cold hydraulic testing and hot functional testing of the primary coolant system.


‘Heart’ of Fuqing Unit 5’s CI Completed

The operating floor of the turbine foundation block for Fuqing Unit 5, the world’s first HPR1000 reactor, was completed on November 17th. It took China Nuclear Industry 24th Construction Company, a subsidiary of China Nuclear Engineering & Construction Corporation (CNEC), nearly 33 hours to pour a total volume of 2400 m3 concrete. This was the next major milestone of this FOAK unit following the topping-off of the reactor dome itself, and the most important concrete-pouring milestone since the first concrete was poured for the CI plant hall. It paves the way for the subsequent installation of key equipment including stators, condensers, and the steam generator turbine.


Sanmen HTGR Project’s Pre-feasibility Study Report Passed Milestone Inspection

Under contract by the CNEC High Temperature Reactor Holdings Corporation (CNECHTR), China’s domestic Electric Power Planning & Engineering Institute (EPPEI) organized an inspection meeting for the pre-feasibility study report of CNEC’s Sanmen high temperature gas-cooled reactor (HTGR) project. The meeting was held in Hangzhou, Zhejiang Province, from November 16th to 17th. The pre-feasibility report passed this inspection, hitting an important milestone for the commercialization and development of building HTGR projects on (conventional) thermal power plant sites. It is a revolutionary idea and brand-new low-carbon strategy to replace thermal power plants with HTGRs. The replacement will benefit the economy in multiple ways, including value appreciation of state-owned assets and better utilization of (conventional) thermal power plants. It will also serve political purposes, for example, mitigating the conflicts for local governments to balance between environmental protection and emissions reductions on the one hand, and economic development and social stability on the other hand.

Nuclear News Weekly Roundup – 11/13 - 11/17

Phase II of the Generic Design Assessment for Bradwell B HPR1000 Project has Entered Phase II

On the morning of November 16th local time, CGN and its local partner, EDF, released a joint announcement that the UK Office for Nuclear Regulation (ONR) and Environment Agency (EA) have given approval for the Bradwell B HPR1000 project to proceed onto phase II of the Generic Design Assessment (GDA).


Fangchenggang Unit 3 CI Turbine Building Raft Foundation Concrete Pouring Complete

On November 12th, CGN’s HPR1000 demonstration project at Fangchenggang reached another milestone. Unit 3’s CI finished pouring concrete for the raft foundation of its turbine foundation. It has laid the groundwork for further civil construction tasks.


Steam Generator of World’s First FPR1000 Delivered, Marking the Start of Primary Equipment Installation

On November 10th, first steam generator of Fuqing Unit 5, the world’s first HPR1000 and CNNC’s demonstration project, was successfully introduced into containment through the 16.5 m2 gantry platform. The ZH-65 steam generator used in Fuqing Unit 5 was designed and developed by CNNC and is one key piece of equipment in the reactor primary coolant (RPC) system, transforming heat from the reactor core into steam, which in turn generates power. As the crux between the primary and secondary coolant loops, steam generators act as the ‘lungs’ of the reactor. This successful milestone marks the start of primary equipment installation for Fuqing Unit 5.


Views Not Our Own - An Analysis on The Outlook of Westinghouse's Impending Bankruptcy and Suggestions for the Chinese Nuclear Industry Response

Nicobar note: In the "Views Not Our Own" series, we publish translated opinion pieces and analyses from thought leaders and influential figures in the Chinese nuclear sphere to allow watchers of China nuclear to gain greater insight into attitudes and sentiments within the  market. The views and perspectives within this translated essay are solely those of the author and do not represent Nicobar Group.

This article was originally published in a combination op-ed + Q&A format with the writer and most topics were addressed far more candidly than you usually see from anyone highly placed inside the Chinese nuclear industry. This is likely a direct reflection of the fact that the writer, Mr. Wen Hongjun, has been retired for nearly a decade and doesn’t have to use the same tactful language you’d expect from current industry players. In our translation, we’ve done our best to translate his sentiment and positions accurately, including portions that came across as more emotional or filled with nationalist sentiment, of which there are many. Mr. Wen’s opinions should not be taken as representative of Chinese industry sentiment as a whole, but rather one perspective from one extreme side of the spectrum. 

An Analysis on the Outlook of Westinghouse’s Impending Bankruptcy, and Suggestions for the Chinese Nuclear Industry Policy Response

Author: Wen Hongjun
Publish Date: October 31, 2017

Translation begins below:

The impending bankruptcy of Westinghouse, a company widely viewed as the “grandfather” of nuclear power development, came as a shock to the worldwide nuclear power community this year.

Westinghouse’s rapid decline and descent into bankruptcy territory

 1.       The AP1000 project is quickly losing steam, marking the decline of Westinghouse

On March 29th, Westinghouse submitted a bankruptcy protection application to the American bankruptcy court. [Following this] The owners of the two American AP1000 nuclear builds in progress, V.C. Summer and Vogtle, announced on July 31st and August 31st, respectively, that they had submitted [construction] continuation proposals to the Georgia Public Services Commission (PSC).

Of the four AP1000 project construction permits [recently] issued by the US Nuclear Regulatory Commission, two [were issued to] V.C. Summer and Vogtle, which are currently under construction, and two additional permits were issued for Lee in South Carolina, and Levy in Florida.

 In just one month, Westinghouse has lost nine units belonging to four projects; two units with the termination of V.C. Summer, the four planned units between Lee and Levy, and 3 units with the “loss” of Moorside. This upheaval is the symbol of both Westinghouse’s wax and wane on the whole, as well as its accelerated decline.

Westinghouse was able to achieve this “wax” with the help of China and its decision to procure of 3rd generation technology, but suffered a series of defeats in the international market, pulling each of its partners into “economic crisis” with each foray. In the end, Westinghouse itself also fell into the “mud pit” that is [its current situation].

According to American bankruptcy law, companies must propose a restructuring program as well as a debt repayment plan approved by both the creditors and the bankruptcy court to receive bankruptcy protection, otherwise the only alternative is “bankruptcy liquidation” [with no recovery option]. The termination of the V.C. Summer build has only served to hasten Westinghouse’s path to bankruptcy. Earning the creditor’s approval of the restructuring program and debt repayment plan is only the first juncture in Westinghouse’s uncertain attempt at survival. The second juncture will be to see whether or not the company, post-restructuring, will be able to sell itself to a new buyer.

2.       Westinghouse: From Resurgence to Decline

China supported and helped realize this resurgence. In 2005, BNFL, then Westinghouse’s parent company, decided to sell Westinghouse. Under BNFL’s control, Westinghouse had underperformed, leading to the decision to have it auctioned. At the time China was inviting tenders for third generation nuclear technology and Westinghouse’s AP1000 was the preferred model. It won the tender, and Westinghouse’s value skyrocketed, sending it down the road to resurgence. Within just a short period of time, Westinghouse’s AP1000 and the French EPR entered into a series of competitive bids in the international market, both winning widespread favor by promoting the technologies’ “advanced” qualities. From this, the two formed a “dynamic duo” that could be seen anywhere a new project emerged.   

 Westinghouse lost its competitive edge, and was left empty-handed. Westinghouse’s positive outlook during this “resurgence” was short-lived; it suffered repeated losses in a series of bids, gaining nothing in the process. It was defeated, for example, [in its bids at] Benele in Bulgaria, Ostrovets in Belarus, and Visaginas in Lithuania. Once the lie, promoted by Westinghouse during the tender process, of the AP1000 being “the most economical option” was exposed, the lack of appropriate verifications subsequently came under scrutiny, and Westinghouse saw a decline in its credibility. Additionally, Westinghouse had no plan [for its customers] to help address treatment and disposal of spent fuel or offer support to raise capital, causing it to be a weak competitor overall. It was therefore not invited to participate in several project tenders and was unable to even secure itself “a seat at the table”. This was exemplified by the bids for Jordan’s QasrAmra and Finland’s Hanhikiri projects. Moreover, Westinghouse failed to secure its own livelihood, even when it was faced with some of the best scenarios possible, namely, in instances in which its buyers had no other choice of suppliers due to political maneuvering; it still experienced project cancellations due to its own internal issues. For example, Temelen in the Czech Republic and Kozloduy 7 in Bulgaria were unable to accept the higher rate of electricity to the end-users that would result from the high cost of the project. It wasn’t economically feasible. Recently the Moorside project in the U.K. has run into some trouble too, so there’s basically no chance of using the AP1000 there. With no international competitiveness, long periods of time with no orders, and no profits, how could Westinghouse remain profitable?  These failures have caused Westinghouse and its partners, one by one, to spiral into decline.

 The American builds have been terminated. America’s new AP1000 NPP builds were subject to delays and burdened with cost overruns, and were forced down the path to termination, incurring heavy economic losses. In the end Westinghouse itself fell into financial crisis, charting its own course into bankruptcy. The aftermath of V.C. Summer’s project termination was painful; Westinghouse laid off 870 workers, including 125 from its headquarters in Monroeville. Another thousand or so subcontractors lost their jobs [too]. In order to protect their interests, the [newly] unemployed workers brought a lawsuit against Westinghouse with the bankruptcy court. On September 25th the Pittsburgh Post-Gazette reported that law enforcement, at the request of both the South Carolina Judiciary and House of Representatives, has begun a criminal investigation against the two project owners for the 900M USD loss incurred due to the failure of the project.     

Westinghouse’s partners have fallen into crisis, one after the other. Failure to receive new orders also affected Westinghouse’s partners. They too have experienced financial crisis and have fallen like dominos one after another. During the resurgence period, Westinghouse assembled a consortium, including Shaw, CB&I, etc., to promote the AP1000. Shaw became the first domino to encounter financial difficulties. First, it returned its 20% share in Westinghouse to Toshiba in order to survive longer. This strategy did not help them to sustain operations and Shaw ended up being taken over by CB&I, its “brother” in the consortium. Later on, CB&I could not sustain operations itself and sold off its subsidiary, S&W. This time, Westinghouse had to take over the company on its own. This misconduct has led to more than one billion dollars’ worth of losses and has pushed Toshiba, Westinghouse’s parent company, to the edge of bankruptcy. The owner of VC Summer NPP has been summoned for interrogation by the overseeing authorities and faces investigation of criminal liability.

The key lesson learned is that the AP1000’s superlatives publicized by Westinghouse are mostly exaggerations. [People] blindly bought their words, followed each other blindly, and only ended up with infinite suffering.

China introduced AP1000 technologies and is now finishing the technology transfer

 Our country started the process to import AP1000 technologies in 2006. It has been over ten years and the projects (Sanmen and Haiyang) have entered their final stages. Now it’s time to “finish the apprenticeship.” The AP1000 projects have finished most of the construction as well as the subsequent design optimization for additional auxiliary systems. Based on our digestion of the technologies transferred, we have additionally designed a 1400MWe demonstration unit which is now almost ready to start construction as well, as soon as the remaining issues are addressed. Therefore, we have basically mastered the transferred technologies and are going to finish our apprenticeship. Well, the last few steps are the hardest. As the Chinese saying goes “the first ninety miles of a hundred-mile journey is only halfway to the end,” and we still face tough challenges. There are two reasons behind our quick learning of the transferred technologies. On one hand, our intelligent engineers and technicians have striven really hard. On the other hand, the technologies and design provided by Westinghouse were so immature and full of gaps that our engineers had to make up the differences by themselves, which actually gave them the opportunity to better master the technologies. Solving the problems on their own made it easier to understand, absorb, and master the core content of the introduced technologies.

The AP1000 under construction in our country is neither the Revision 15 permitted by the U.S. NRC, nor the later-permitted Revision 19. We developed our own version with some “Chinese characteristics.” After Westinghouse started the bankruptcy protection proceedings, the new CEO Jose Gutierrez announced that the AP1000 model under construction in China would replace the originally-planned Version 19 and become the standard AP1000 model to be promoted by Westinghouse in the future. It appears that the China model has more potential than the original Rev. 15 and 19 and has become Westinghouse’s orthodox “C [China]” model.  Yet it does not change the ownership of the intellectual property rights. The following AP1000, or ‘CAP1000’ units to be built in our country are still the “American AP1000,” and the intellectual property rights have nothing to do with China. In addition, the design itself has some unresolved problems; we have had to purchase some special equipment and materials through Westinghouse. The special equipment and monopolization of certain materials may become Westinghouse’s “grasping tools” and make it easier for them to raise prices for, blackmail, or control [the projects in China]. Despite the fact that we are almost finishing the apprenticeship, wide gaps still exist between our current status and owning a brand with complete intellectual property rights.

The value, assets, and capabilities of Westinghouse

 1.       How much is Westinghouse worth?

In 2000, the valuation was 1.585 billion dollars. BNFL purchased Westinghouse in March 1999 at the price of 1.1 billion dollars and took over ABB-CE for 485 million dollars in December of the same year. The two companies merged into Westinghouse Electric, which was worth 1.585 billion dollars.

In 2006, Toshiba purchased Westinghouse at 5.4 billion dollars. In 2005, BNFL experienced financial strain so it put Westinghouse for auction with a reserve price of 1.8 billion dollars. The Mitsubishi Group bid 1.78 billion dollars [at the beginning]. Meanwhile, China was tendering for Gen III reactor type and nuclear technologies. The fact that China was favoring the AP1000 enabled Westinghouse to speak so high of itself that the bid price was driven up. Mitsubishi tripled its bidding price to 3 billion dollars. In the end, Toshiba anomalously offered 5.4 billion dollars and won. The final price was three times higher than the reserve price and Westinghouse was overvalued.

2.       Westinghouse’s usable assets and shortcomings.

Westinghouse is regarded as the pioneer, or “grandfather,” in the nuclear industry worldwide and used to make enormous contributions [to the industry]. Westinghouse started from the military industry with its core competencies in developing and designing reactor types. At this moment, with the parent company Toshiba wanting to sell Westinghouse in response to its own financial strain, I expect that someone will take over Westinghouse’s reactor type technologies and services, which are valuable and usable assets. Westinghouse also has a number of PWR fuel assembly plants which are still serving Gen II NPPs worldwide. Although the Gen II technology is outdated now, fuel assemblies are still essential to the operation of these Gen II NPPs. Therefore, they are usable assets as well.

However, nuclear engineering and construction, i.e., EPC, project design and project management, is not Westinghouse’s strength. Toshiba decided during its financial crisis that Westinghouse will no longer engage in construction projects and will stay focused on the areas of reactor design and maintenance services. This decision also suited Westinghouse’s historical characteristics. In the past, Westinghouse was mainly responsible for the reactor main body in its military and civil nuclear projects, while other engineering and construction companies were contracted to perform the roles of EPC, engineering design, and project management. Manufacturing responsibility for fabrication of primary equipment in the NPP were transferred to Japan and Korea. Westinghouse now suffers severe devastation from taking on the EPC contracts for the two AP1000 projects in the U.S., which serves to prove [that Westinghouse shouldn’t be in this business]. In terms of comprehensive competitiveness in the market, Westinghouse lacks operational experience in NPPs, capacity to finance its projects, and capability to facilitate fuel supply and spent fuel management. Current [new build] markets in developing countries usually require comprehensive and integrated services for the above areas, which Westinghouse cannot provide. This is one of the main reasons why Westinghouse suffered repeated defeats in international tenders.

3.       Core technologies remain unverified. Application of advanced technologies has to be preapproved and verified. Unverified “advanced technology” is merely a potential safety hazard.

The design of the AP1000 is Westinghouse’s core asset. It has been 17 years since the original design concept was first presented. Rev. 15 and 19 of the AP1000 design obtained their design certificates from the NRC and the AP1000 project in the UK also passed its Generic Design Assessment. The AP1000 won China’s tender for Gen III nuclear technology and initiated the construction of four units at two sites in China. In the U.S., another four units at two sites were also initiated as the AP1000 design Rev. 19 ‘demonstration and verification projects’. The two batches of ‘demonstration and verification’ projects have eight units in total and should have been completed a long time ago according to the original plan. It is now time to see their results. However, because this is a brand new revolutionary technology, the demands for verification and validation of the design were high and there were many items that needed to be verified. With time limitations, the verification work was insufficient and the results were not reliable. As time went on, many ‘inherited’ problems were discovered. In contrast to progressive or evolutionary design, a so-called ‘revolutionary’ design requires some substantive experimental research, including scientific feasibility verification for completely passive safety systems, the probability and mechanism for hydrodynamic failure in the passive residual heat removal system, etc… Due to time constraints, these tasks were not completed. Other potential hidden security risks are also yet to be ruled out, for example verification and validation testing for the canned motor pump and explosion valve. 

4.       It’s time to end our blind faith in Westinghouse

Westinghouse used to be known as the “grandfather” of nuclear technologies and made lots of contributions as a pioneer. But it has not set its feet in field construction for too long and has little modern experience. It has also gotten slow and aged in technology development, and has already lost the glory of the old days. [For example,] Westinghouse’s design for an SMR is just a miniaturized AP model (22.5MWe) and is not innovative enough. The SMR design lost two rounds of tenders held by the U.S. Department of Energy and was defeated by B&W’s Generation mPower and a 5MWe NuScale model.

Westinghouse’s fuel assembly business is declining as well. For example, one of its old fuel assembly plants was taken over by the French company Areva. In another example, both Russia and the U.S. plan to reprocess and recycle plutonium for peaceful uses. The U.S. wanted to build a MOx fuel plant [and opened tendering for the program]. Westinghouse was not qualified to participate the tendering because it did not have the technology. Westinghouse also has a few Gen II light water fuel assembly fabrication facilities with outdated technologies. It got a big contract to sell the Russian-style fuel assemblies to Ukraine with the assistance of the U.S. government’s diplomatic and political leverage. However, two major accidents occurred during the trial period and became a black mark on Westinghouse’s reputation in the international market. It was basically a straight copy of the older Russian technology back from in the 1970s and Westinghouse still messed it up. It further demonstrated Westinghouse’s limited technological capabilities.

Who will take over Westinghouse?

Following the conclusion of Westinghouse’s bankruptcy protection, the next juncture would be restructuring to be sold as a newly integrated corporation and find a new owner. Who will take it over?

1.       Attitude of the U.S. government

President Trump promised to rescue the dying American nuclear industry. A senior U.S. nuclear policy research fellow advocated that “the U.S. government should restore and develop nuclear industry” and proposed many policy recommendations. However, with regard to whether to save the bankrupt Westinghouse or not, the researcher’s opinion was to give it up and said it is both “impossible” and “unnecessary” to save it. A report in another recent article claimed that the U.S. government is seeking a buyer to take over Westinghouse so that it will not fall into Chinese hands. This article focused on the three actions being studied: the U.S. government directly impedes [any potential sale to] China; encourages domestic investors or those from ally countries to take it over; or purchase its stocks directly and holds the shares [as state property].

Westinghouse let the U.S. government down as a diplomatic tool. As a diplomatic and political tool of the U. S. government, it performed poorly and inspired disappointment.

The U.S. government placed sanctions on Russia as a response to its activities in Ukraine. It mandated Westinghouse to provide Ukraine with the Russian-style fuel assemblies as a substitute supplier for Russia so that the strategic connection between Ukraine and Russia could be cut. The movement was a part of the plan to sanction Russia with diplomatic isolation. Westinghouse got this big contract with great support from the U.S. government and the international political environment. Yet two accidents occurred during trial operation using Westinghouse’s copies of the Russian design. The project was slowed down and the Russia-Ukraine connection remained.  

The U.S. government also planned to use the AP1000 to infiltrate the Chinese nuclear market and serve as a portion of its strategy to control the development of China’s nuclear industry, but this has been a complete failure. At the beginning of the introduction of the AP1000, China accepted the exclusive policy called the “leap forward development” and agreed to halt all construction of non-AP1000 units.  [Under this deal] China would hand over its whole nuclear market to Westinghouse and it could control and blackmail China through its patent rights, special key technologies, equipment and materials. Foreign media commentators said that “it creates possibilities for the U.S. government to suppress the development of the China nuclear industry and thus achieve a strategic goal.” But as the project was carried out, it met widespread doubt in Chinese nuclear circles. During construction, issues constantly arose with regard to technology, equipment, delays, overruns, etc. With the collective endeavors of China’s domestic experts, China broke through the constraint to exclusively develop the AP1000. There were two main rounds in the breakthrough: first, the domestically modified Gen II + reactor type realized industrialized/large scale development and made China a leader in the global new build market; second, the launch of the original HPR1000 reactor design of which China owns complete proprietary intellectual property rights. Now it’s time for a third round: finish the technology transfer of AP1000, turn it into a brand with our proprietary intellectual property rights, and get rid of dependence on foreign technologies and foreign control. Therefore, we are able to crush the U.S. attempt to control the China nuclear market through the AP1000 and suppress the development of China’s nuclear industry. This has also caused the U.S. government to be disappointed with Westinghouse.

In one word, the U.S. government is fully aware of the technological capabilities and operational situation of Westinghouse and regards it as what we call “chicken ribs” in China:  be hardly worth eating but not bad enough to throw away. The U.S. government is unwilling to spend the money to save Westinghouse, while being afraid of seeing it falling into Chinese hands. The ideal situation would be finding a submissive new buyer to spend its money, save Westinghouse, and run the company on the U.S. government’s behalf.

As a response to public queries toward the necessity and feasibility of building new NPPs in the U.S., officials have repeatedly claimed that nuclear technology is a diplomatic tool. The four units under construction in China still serve some diplomatic purposes as part of America’s foreign policy toward China, yet their importance has fallen greatly.

2.       Korea's KEPCO

Westinghouse is now on the edge of bankruptcy and who will take it over? The Korean company KEPCO is believed to be a possible candidate. However, according to Financial Times, Korea has eliminated the possibility to purchase Westinghouse shares. It also says that Korea still wants/welcomes foreign technologies yet the country already has its own technology. The takeover has enormous financial risks and very few people are pushing for it [in Korea].

There are also two challenges if Korean Electric Power Corp., (KEPCO), wants to buy Westinghouse. First, how to run the company? It will follow Toshiba’s tragic trajectory if it becomes the new parent company while the executive power remains in the hands of U.S. government, just like Toshiba’s “ghost ownership.” Second, Korea already has its original APR1400 technologies and the Barakah project, a technology export to UAE, has been a success.  The APR1400 has already became a black horse in the international market and there is no need for Korea to also introduce the frequent loser, AP1000. The new Korean president Moon Jae-in has also announced the de-nuclearization policy and has promised to phase out nuclear power gradually in Korea. There will be no more domestic market for APR1400 and so KEPCO is looking for more opportunities in the international market, for instance the U.K. KEPCO is also interested in investing NuGen’s Moorside project, with the requirement being to replace the AP1000 with APR1400.


3.       U.S. non-nuclear private enterprise

It was reported on September 27th that BlackStone, an American private capital group, and Apollo Global may want to acquire WEC.   

Will China save Westinghouse? 

 Pay attention to changes that already occurred. The situation this time that Westinghouse is looking for a new owner is drastically different from the 2005 BNFL tendering.

First, Westinghouse has changed a lot. Last time when BNFL was selling it, Westinghouse had just launched the blueprint of the AP1000 design and obtained permits from NRC, while China was favoring the design which gave it more leverage. This time, however, it is ‘begging’ to sell after Westinghouse was repeatedly defeated in international tendering and had projects terminated due to cost overruns and project delays. It cost the parent company huge losses. Westinghouse is becoming “chicken ribs” quickly and is making itself look really bad.

Second, the previous tendering was well prepared. It was like seeing the daughter getting married off with lots of trousseau. This time, on the contrary, is an emergency response to pay off the debts. It’s a desperate move like selling your children.

Third, China used to favor AP1000 a lot and now has its own doubts. China found out that the technologies transferred are far less advanced than what Westinghouse claimed them to be and now feels like it was fooled.

Fourth, the U.S. government now has lower requirement for a new owner. Last time, the executive power remained inside Westinghouse and didn’t go to Toshiba with the ownership. Now that clause is gone as long as the company stays out of China’s touch.

 Will China bail them [Westinghouse] out?

 In principle, no. We already have our own technology portfolio, including what we’ve imported and there’s nothing we could need there, apart from a small portion of their usable assets that could be sold off (and there aren’t many). Westinghouse’s reputation isn’t what it used to be, so it wouldn’t be much of an asset for us leverage in our export efforts. Besides, we need to liberate our way of thinking…we have passed the point of needing to import tech…we have our own smart technical experts and proprietary IP – it’s time to work on self-improvement.

There are specific scenarios in which we would bail them out, but the following [4] conditions must be met:

First, it couldn’t be under a “dual-citizenship” management framework like what was done with Toshiba; the control would need to be entirely in our hands

Despite the so-called “minimal inference” policy that the US government promised the Japanese, what actually happened is that Toshiba assumed all the financial liability of the company while the planning, strategy and management all lay with the Americans. With poor management, it created huge losses [for Toshiba]. In addition…Westinghouse became like a diplomatic tool for the US government. We need to have actual leadership authority

Second, the price would have to be very low

Westinghouse doesn’t have any leverage to negotiate. And if we caught any whiff of US government interference or another company in the running, we’d pull out immediately. There’s no need to pay big money for spoiled goods.

Third there would need to be an adjustment to the direction of operations.

 We would want to see it focus exclusively on its strengths in reactor R&D, and pull out of the reactor construction business. Their activities would be merged into our comprehensive national nuclear power R&D plan. 

Fourth, there would need to be a complete restructuring

Just like what EDF did with BE in the UK, we would totally restructure after acquisition, take control of the strategy and operations philosophy, turn it into a Chinese research and design institute for nuclear reactors, and do away with the Westinghouse brand-name

4. How the Chinese Nuclear Industry Can Move Forward [Following Westinghouse’s Bankruptcy]

Provided safety can be assured, we will complete construction of the current AP1000 builds.

The V.C. Summer and Vogtle projects [were supposed to be] Westinghouse’s “second echelon of AP1000 test platforms” before meeting a premature end. The Chinese plant construction projects at Sanmen and Haiyang, as the first echelon, have the primary function of proving the overall viability of [AP1000] construction and technology, as well as its economic [viability], and those projects proceeded relatively smoothly compared to the second echelon in America. But, due to issues arising from intrinsic characteristics of the AP1000 design, those projects, as was the case with the American projects, also saw problems with cost overruns, delays, and equipment deficiencies, which added on [an extra] 4 years to the project and nearly doubled the cost of investment. That money will be difficult to make a return on, and the economic survivability of the projects is now a matter of uncertainty. However, China invested painstaking effort and a considerable amount of money into these projects, and should therefore continue [with them], learn [from them], and strive to gain [from them].

However, these projects can only continue under safe conditions. We must do our utmost to avoid [what could be] objectively risky or any “shortcuts” to deadlines, treading safely forward. We [should] only make progress once the remaining technology-related safety issues, or any other hazards have been removed from the equation.

Westinghouse should be held strictly liable and financially responsible for any of the losses incurred due to its unfulfilled contractual obligations.

Firstly, we should conduct a “disassembly inspection” of the canned motor pumps, loading nuclear fuel only once we are sure [the components] are intact. Problems with canned motor pumps are often only discovered during the “disassembly” portion of the testing [phase]. “Changes” [in how the pumps run] have been observed with several pumps that have been in operation for a long [enough] period, giving [us] ample reason to be worried about the [the possibility of other] remaining issues. We should use “disassembly inspections” to verify [the safety of the equipment] and assuage people’s concerns. Conducting these inspections prior to fuel loading is both wise and necessary. Westinghouse, in its role as the supplier, did not provide sufficient reason for refusing [to conduct these inspections in the first place]. Since the cost wouldn’t be that high, this could only be indicative of fear and a guilty conscience [on the part of Westinghouse]. This refusal “vainly” attempted to push the burden of responsibility onto the Chinese leadership [within the industry]. Now that we are waiting on approval to begin fuel loading, [Westinghouse], in theory, would absolutely have the time to complete this task.

Secondly, The AP1000 is not simply a follow-on design to other third generation models, it is a revolutionary design [requiring] substantial research and development; this R&D is [precisely] the prerequisite for moving construction along. The scientific feasibility of the AP1000 passive safety systems should have been verified in the demonstration phase. [An item of such concern], for example, is the study on the hydraulics testing failure rate of the residual heat removal system. Westinghouse already “tested” [this] using Sanmen’s unit 1, and how did that work out? Was that the proper [administrative] channel to go through? Was the problem solved? [I] don’t know why [we] haven’t yet seen a public announcement on the result [of that testing]. [Some] people suspect that the testing was not in keeping with its original intention. The question of the safety concerning AP technology needs [to be answered] with transparency and objectivity.

There are additional remaining problems similar to [what was revealed by] the feasibility testing of the explosion valve, and we should continue to address them.
Based on research digested from importing the AP1000 technology, as well as the significant amount of its own independent R&D, SNERDI has made much progress on the development of the CAP1400. But the problem that the CAP1400 is facing is related to the AP series [as a whole]. Its construction should only be commenced after testing of the primary pump has been successful, and after other AP series issues are addressed [at the base] with the AP1000.

Future Prospects and the Way Forward for the AP Series

Design changes must be made. The AP1000 has suffered a series of attempts and [subsequent] failures in the international market, and [is now] in the midst of bankruptcy following the failures of the two [aforementioned] American builds. The, by contrast, relatively smooth projects in China also experienced delays and cost overruns, with the fundamental problem resting in Westinghouse’s “modus operandi” [that consists of] manipulating competition within the international market, and seeking innovation at the cost of economic [feasibility]. And in the process of “robbing us of progress”, Westinghouse neglected the thorough scientific testing of new technology, and fell into this trap of [having its technology labeled] “expensive, delayed, and subject to cost overruns and safety issues. [Westinghouse’s failure here] has additionally resulted in high [investment] costs and high electricity prices [needed to cover the costs], a loss in its ability to produce carbon-alternative power, a loss in its ability to compete with wind and solar, grief on behalf of the government and the people, and its very means to self-reliance and survivability.

How can China pursue development now that the AP1000 technology has been imported? We must make our own design changes, including major changes to the design scheme, pushing for greater “maturity”, more “Chineseness”, as well as more cost-saving, creating our own brand “with Chinese characteristics”. [These changes] are necessary for the survival of the development of the AP-series technology.

We need greater emphasis on ensuring safety and mature development, achieving each in full.

Advanced technology that has yet to be proven isn’t advanced, it’s a hazard. To address this, we need to conduct ample testing or substitute [the tech] with mature technology that has already been proven. Canned motor pumps and explosion valves [are components that] are potential causes for concern. If it seems the components should be replaced, there is no need to rigidly adhere to the “passive [safety] framework” [of the AP1000 design]. We need to get rid of each of the existing safety hazards.

Completion the upgrade and advancements with Chinese rebranding and improved economics.  We must create a proprietary brand with [Chinese] characteristics. Based on our experience with field construction, we should perfect the model and make it more Sinicized and standardized. We want it to be a reactor type that can be made by ourselves and reflect the true strength of Chinese nuclear industry. The Sinicized model must be suited for China and must be integrated into standardized Chinese systems, for instance, using 50 Hz power supply equipment to replace the 60 Hz ones. We need to erase the traces of America and Westinghouse. We ought to achieve proprietary and localized sophisticated technologies. For those equipment and materials with a monopolistic nature that are harder to buy in international markets, we need to localize them as soon as possible. Canned motor pumps is one instance where foreign companies could use a market monopoly and derivative pricing power and supply capability to blackmail and control China. It is also urgent to solve the IP-related problems.

Lower the costs and making plants cheaper is also necessary to suit the situations of developing countries. It is a primary goal and necessary condition for our original model to survive and develop, and a prerequisite to eventually “go out” into international markets. The French-developed EPR now has a new version design called “EPR-New” that aims for a 25% cost cut (this is still not enough, they’ll need to work harder). On the flipside, no upgrade plan has been mentioned by Westinghouse with regard to the AP1000. We should do it by ourselves. The new model should meet the modern demands for the development of nuclear power.

The new model need to be distinct enough and cut its connections with the old AP design. It should have its own uniqueness as part of an original Chinese [reactor type] system. It is important to cast off the dependence on America’s Westinghouse and its control. I suggest to give it a new name with Chinese characteristics. Since we already have “Hualong” [China Dragon, HPR1000], we can follow this example and name it something like “Xiafeng” [Sino Phoenix], meaning the Chinse nuclear industry will have both dragons and phoenix and will fly high in the international market, very auspicious indeed. 

This positive outlook needs to develop a solid foundation. We need to set our feet on the ground and work really hard. First of all, we need to solve the existing problems of the projects under construction and do a good job on our upgrades of the current reactor designs. The bright future will be nothing but empty talk without sufficiently strong endeavors on our part.

We need to resolutely and consistently promote the development of Hualong One [HPR1000] technology both domestically and abroad.

We need to excel on our domestic and overseas projects

 We need to build Fuqing Unit 5&6 and Karachi Unit 2&3 in good time, breaking through the “normalcy” of schedule delays for FOAK construction. These four units need to be established as outstanding examples of nuclear project construction. We also need to improve our marketing and promotion capabilities.

We need to have the HPR1000 tech verified under the EUR apparatus as well as the GDA in the UK.

CGN has already applied for the British GDA [for the Bradwell B project]. I urge CNNC to apply for safety inspections of related EUR institutions. Once they perform well and pass the assessment with high marks it will be easier to promote our international reputation and accelerate the speed of ‘going out.’

Strengthen further development of the Hualong 1 [HPR1000]. We need to adapt digital and computer-based technologies and further develop the Hualong 1 to make it safer and more economical.

Move toward the direction of having a systemized series. We need to further upgrade [the current reactor types] and make them a systemized series, which strengthen our capabilities to “go out” to meet the diverse and flexible market demands.

The import of the [foreign] AP1000 technology has now morphed into a potential opportunity for China to develop an indigenous 3rd Gen reactor type. Once our technological “metamorphosis” is complete, we can free ourselves of Westinghouse, free ourselves of the shadow of the AP [series], “spread our wings as a phoenix reborn”, and realize a brighter future for ourselves.

 Final Words

The mainstream western technology exemplified by the AP series and the French EPR design have both fallen into the trap of being expensive, both subject to delays, both subject to cost overruns, both fraught with equipment safety hazards, and both leading to bankruptcy for their designers. On the other hand, the Russian VVER1200, the Korean APR1400 and our own Hualong all have a reasonable price, on-time construction, strong orders, and have none of the other problems associated with the mainstream western models.

In the new age of Gen III, we have witnessed a distinct contrast between the mainstream western reactor types and the Chinese, Korean, and Russian ones. The Chinese nuclear industry has been recognized worldwide for our economical and effective construction capabilities. The delicate design of the HPR1000 integrates active and passive designs well and is extremely economically competitive. Although we had an 8-year pause in R&D, we have now caught up very quickly. 6 units are currently under construction, which also demonstrates the future livelihood [of the reactor type]. Phasing out the outdated and embracing the innovative is a natural trend. Survival of the fittest is the secret to thriving. Our country’s nuclear industry development is eliminating dependence [on Western technologies], breaking through external constraints, overtaking the mainstream designs, and stepping into a new age.



Nuclear News Weekly Roundup – 11/06 - 11/10

World’s First HPR1000 Steam Generator Delivered to Fuqing Unit 5

On November 9th, Fuqing Unit 5’s steam generator was delivered, the world’s first for an HPR1000 unit. It was placed beneath the bridge crane and is ready to be installed on the NI’s 16.5 m2 platform.


LOT1, Digital Control System (DCS) Equipment of Karachi Unit 2 Passed Acceptance Inspection

Karachi Unit 2’s DCS equipment, LOT1, has recently passed its acceptance inspection. The purchaser, China Nuclear Industry Zhongyuan Construction Corporation, organized the inspection and assembled a team of more than 30 expert participants from CNPE, Huadong Electric Power Design Institute, and Beijing Starbecs Engineering Management Company, an engineering project supervision subsidiary of CNPE. Inspection items include an acceptance examination of the equipment and quality assurance inspection. The inspection team carefully examined the documents and records produced during the “working stage”, such as those related to the required equipment analysis, engineering design, procurements, manufacturing, and testing, etc. The experts also conducted visual checks on the DCS equipment as well as spare parts, and ran tests to check system functionality. The inspection team verified that the equipment meets contract requirements and complies with all the technical specifications and list of acceptance inspection standards. Following this, the DCS LOT1 equipment for Karachi Unit 2 received shipping approval.


HPR1000 Prototype Generator at Fuqing Unit 5 is Successfully Developed and Produced

On November 6th, the first HPR1000 half-speed turbine generator prototype, which is being used at Fuqing Unit 5, passed in-house prototype testing. Turbine generators are the primary equipment used to turn nuclear energy into electrical power. The half-speed turbine generator was developed and produced by Dongfang Electric. The development of the prototype faces various challenges related to its complex specifications, large size, complicated structure, sophisticated technology, etc. The prototype test includes 27 different tests and observations, including open circuit and short circuit test, as well as temperature increase and vibration observations, etc. Each technical performance test fulfilled contract requirements and technical specifications, and has the overall highest technical performance in the world.


Fuqing Unit 2 Finished Its Second Outage

On November 6th, Fuqing Unit 2 was brought back online after finishing its second outage and refueling period, including all of its related inspection maintenance work, and testing. The second outage of Unit 2, referred to as “Outage 202”, had 6372 inspection and maintenance items completed in 36.2 days. It was Fuqing Unit 2’s first annual short outage.

Nuclear News Weekly Roundup – 10/30 - 11/03

Hongyanhe Unit 5 Reached its First NI Installation Milestone

On October 31st installation of the ring crane at Hongyanhe Unit 5 was completed, marking the first NI installation milestone for the project. The ring crane was installed and is now ready for use 15 days ahead of schedule, setting a solid foundation for installing primary equipment and related components.


NI Plant Civil Construction Drawings for HPR1000 at Fangchenggang Unit 3 Published

On October 31st, the final installment of the NI containment building’s civil construction drawings detailing the HPR1000 build at Fangchengang Unit 3 was published. With this release, CGN has now published all of the civil construction drawings of its Fangchenggang flagship HPR1000 reactor.


Fuqing Unit 3 Enters First Outage/ Refueling

On October 31st, Fuqing Unit 3 finished network islanding and entered “Outage 301”. Outage 301 is the first outage and refueling for Fuqing Unit 3. It will last 69 days and includes 7042 items to be addressed, including refueling the nuclear reactor, hydraulic testing for the primary coolant system, an RPV in-service examination, air-tightness tests for the containment building and penetrations, a full-scope in-service examination for the steam generators and pressurizers, a strip inspection for the turbine’s high and medium pressure cylinder, etc.


First Indigenous Dry Storage Cask Container Prototype Passed Acceptance Check

The first indigenous dry storage cask’s concrete container has recently passed Areva’s acceptance check. The key piece of equipment, the dry storage cask’s stainless steel support rack (DSC support rack hereafter), is manufactured by China Nuclear Industry Huaxing Construction Company, Ltd. Areva’s acceptance indicates that the China Nuclear Huaxing - Areva cooperation project has entered its implementation stage, which lays a foundation for China Nuclear Huaxing to enter the nuclear fuel post-treatment service market. The DSC support rack is installed inside the dry storage cask’s concrete container as the slide rack for filling and discharging DSCs. It is also a structural support for long-term storage and must meet high technical standards like precision and degree of various angles and geometric specifications.

Nuclear News Weekly Roundup – 10/23 - 10/27

World’s First HPR1000 Model Soon to Install Its Largest Primary Equipment

The first ZH-65 model steam generator of Fuqing Unit 5, China’s first flagship HPR1000, was shipped to site on October 20th and will soon be installed, according to Wang Guangjin, research fellow at NPIC. The ZH-65 model is the first steam generator that China holds proprietary intellectual property rights on. As nuclear safety class 1 equipment, steam generators transform heat from the reactor core into steam, which in turn generates power. The steam generator is the largest piece among all the primary equipment for HRP1000 reactors. It has more than 10,000 components and took three years to build. It is also known as the “lung of the reactor” because it is the hinge between the primary coolant system and secondary circuit.


Statement Released on Establishment of Marine Nuclear Power Company

A joint statement was released recently in China that five SOEs, including China National Nuclear Power Co. (CNNP) and Shanghai Electric, will invest one billion RMB to establish a marine nuclear power company, tentatively named as China Nuclear Marine Nuclear Power Development Corporation. The creation of the new company aims for facilitating sustainable development, merging nuclear technologies with naval technologies and offshore-platform engineering, and promoting localizing core technologies of marine nuclear power plants.

Nuclear News Weekly Round Up – 10/16 - 10/20

Fuqing Unit 5’s Deaerator Assembled & Installed

The deaerator for China’s flagship HPR1000 at the Fuqing site (Unit 5) was successfully assembled and installed on October 16th. The deaerator was shipped to the construction site in three pieces (left, middle, and right). The three pieces were then installed and welded together on site. The assembled deaerator weighs 250 tons and has a length of 50 meters. This milestone indicates that equipment installation in the turbine hall will soon begin and that the construction of the conventional island is on schedule and well underway.


Hongyanhe NPP’s 500kV Southern Power Distribution Line Completed, Project Begins Commercial Operation

Hongyanhe’s “Hongnan Line 1” power distribution line recently passed standard evaluation tests and began operating. Hongnan Line 1 connects various points within the surrounding area of Dalian city, making its way first to Wafangdian before connecting through Puwan New District, Free Trade Zone, and finally to Nanguanling transformer station. The 140.2 kilometer line passes through 376 base towers and took almost six years to construct.

Nuclear News Weekly Round Up – 10/09 – 10/13

Tianwan Unit 3 Steam Turbine Generator (STG) First Steamrolling Successful

On October 5th, Tianwan unit 3’s STG was steamrolled for the first time, maintaining a stable 1500 rpm for three hours. Various measured parameters such as upper and lower casing temperature differential, bearing and bearing shell vibration as well as temperature all met standard requirements, indicating a successful steamrolling. This success lays a solid foundation for subsequent steps such as grid connection and transient tests at each of the power platforms. Tianwan unit 3 is now entering its “sprint stage” of grid connection.


First Exported Hualong One (HPR1000) Reactor Pressure Vessel (RPV) Successfully Installed, Validating the “Pre-installation” Method

On September 30th (local time), Karachi unit 2 RPV, the first internationally constructed Hualong One model built using the “pre-installation” method, was successfully installed. The RPV, along with three steam generators were all installed within 21 days following September 10th, indicating that the pre-installation method, wherein major equipment like the steam generators are put into place before the NI dome is ultimately installed, is fully validated. This also serves as a good reference for the construction of subsequent similar-type NPPs. The RPV is independently designed and developed by CNNC’s Nuclear Power Institute of China. It is the first of its kind, and also China’s first fully localized Gen III RPV.


Production of Ningde Unit 5’s Rotating Shaft Forging Completed

China Erzhong Group recently finished producing Ningde unit 5’s rotating shaft forging. Erzhong was awarded the subcontract from Dongfang Electric’s Dongfang Electric Machinery Corporation. This success provides valuable experience for future production of oversize forging made from 600t-level steel ingot.



Nuclear News Weekly Round Up – 9/25-9/30

Dome of Tianwan Unit 5’s Reactor Building Successfully Topped Out

On the morning of September 26th, the dome of Tianwan unit 5’s reactor building was successfully installed. This milestone marks the completion of civil construction and the project's installation phase will begin.


Bradwell B, Britain’s “Hualong One” Plant, Proceeding Well, Expected to Enter Phase II this November

Bradwell B, the nuclear power plant in Britain using Hualong One technology, is proceeding well according to a statement in Beijing last month from Zhang Shanming, General Manager of CGN. The project is expected to enter into phase II of its preparation this November. Zhang also mentioned that China General Nuclear (CGN) and Électricité de France (EDF) are preparing to begin geographical studies at the project site, including soil research and an assessment on the effect of cooling facilities on the protection of local biodiversity. The project is currently in the pre-planning stage.

Nuclear News Weekly Round Up – 9/18-9/22 

Third Steam Generator of First Hualong One Export Installed

On September 14th, 14:38 (local time), the installation of the third steam generator of the first internationally constructed Hualong One reactor – Karachi NPP’s unit 2, was completed. Since September 10th, all three steam generators have been installed according to a “pre-installation” method by which major equipment like the steam generators are put into place before the NI dome is ultimately installed. This milestone indicates that this new construction method has been successfully implemented, thereby laying a good foundation for the entire project and establishing a significant precedent for other Hualong NPPs to come.  


Haiyang Phase I Primary Coolant Pump Installation Complete  

On September 13th, the fourth primary coolant pump of Haiyang unit 2 was successfully set into place. It is also the last primary coolant pump of Haiyang unit 2 and indicates that the preliminary pump installation work is completed. In-containment pump installation work will soon commence. It also lays a good foundation for cold testing of Haiyang unit 2.  


Quote price 88.33 million RMB! Jiangsu ENTC (Hailong Nuclear Technology) wins Fuqing NPP Bid

On September 13th, ENTC released a statement that the corporation won the tender for the procurement package of electrical/mechanical fire sealants for Fuqing unit 5 and 6. The quote price is 88.33 million RMB, which exceeds the company’s 76.0367 million first half revenue.  


Pakistan’s Chashma NPP C3/C4 Complete

On September 8th, the completion ceremony of Pakistan’s Chashma NPP’s C3/C4 project was held in Mianwali city, Punjab province. The Chashma C3/C4 project is a major project in the China-Pakistan economic corridor. CNNC China Zhongyuan Engineering Corporation is the EPC contractor and started the project in March 2011. It is an important milestone in the twenty years of cooperation between China and Pakistan and will boost the in-depth cooperation between the two countries in multiple fields in the future. It will also accelerate the implementation of China’s Belt and Road Initiative while setting a good example for other energy projects in the China-Pakistan economic corridor. Upon its commercial operation, Chashma NPP’s installed capacity will exceed 1300MW and provide clean, efficient, and safe power. Chashma NPP has great significance for relieving the pressures of local power shortages. 


Fuqing Unit 4 Enters Commercial Operation  

Fuqing NPP’s unit 4 has entered commercial operations pahse, raising the site’s installed capacity to a total of 4356MWe. Since November 22, 2014, the four units of Fuqing have been brought online at a rate of one unit per year. To present day, the accumulated generation of Fuqing NPP is 380GWe, which is equivalent to 12.27 million tons of coal consumption, carbon emission reductions of by 40.08 million tons, which in turn is equivalent to over 270,000 acres of forest.  

Why China Won't Hit Nuclear Capacity Targets – Close but no HPR

Back in 2011 the National People’s congress handed down the 12th 5 Year plan. Considering the juxtaposition to the Fukushima disaster, the plans laid therein were a strong declaration that China was standing firm in its resolve to feature a robust nuclear program as part of its national energy mix. China’s long-time goal (since 2000) has been 58 GWe in installed nuclear generating capacity by 2020 – and while that goal on paper didn’t flinch in the face of Fukushima or in the most recent 13th 5 Year Plan, the effects of the accident were certainly felt in real to life terms. Nonetheless, despite industry insider sentiment that the resistance has built up in a significant way that makes the goal impossible, China continues to prop up the number 58.

Is it true? We’ll weigh in here with our back of the envelope math and see what it’ll really take to hit the mark.

operating+construction graphic.png

From the first take, we can already see why people have their doubts:

35.8 + 21.3 = 57.1

That’s pretty darn close – but not quite close enough to fudge it and call it a day. The entire capacity represented by projects currently under construction still falls just under 1 GWe short of the needed 58. The realization of all these projects within the given timeline is also suspect. Particularly dubious are the units with estimated operations commencing in 2021: Tianwan Unit 6 and Fangchenggang Unit 4. I could be convinced to suspend my disbelief on a Tianwan 6 startup in 2020 seeing as it is a CPR1000 design, which China has proven to be able to crank out reliably and increasingly quickly. The true bogey is the first of a kind Gen III Fangchenggang Unit 4 – completing a FOAK nuclear plant in 4 years is a daunting challenge to say the least.

Even if all construction timelines go smoothly (surely, they can get the Taishan EPRs online before 2020?) then we still need to look to add more units to the ‘under construction list’.

Can new FCDs top us up to 58 GWe? There are 2 problems we see with that:

1.       New projects with unfamiliar designs. All FCDs from now on will be on Gen III+ plant technology, with many of them being the first foray into a design for new owners. For example – Lufeng AP1000s will likely see FCDs next year, and although it won’t be the first of its kind, the project owner will be CGN. The experience from the other 4 AP1000 units lies with the owners of Haiyang (SPIC) and Sanmen (CNNC), meaning incomplete integration of lessons learned from those projects into Lufeng.

2.       No plant can be started and finished in 3 years’ time. Yes, this makes the previous point superfluous. We’ll have to wait until mid-2018 to see more FCDs in China, and even assuming any plant coming online within the full calendar year of 2020 China counts toward the goal, no plant would make it under the cutoff. China has proven it can crank out CPR1000s in 5 years, but even for the achieved efficiency with that particular design, 3-4 years from FCD to operational is a stretch.

Is Fukushima all to blame? Almost. The blame can be distributed between the below factors, most of of which are directly or indirectly tied to the Fukushima accident, but one with a disproportionate level of impact is unrelated.

  • 1-year construction moratorium - The brief construction moratorium in the wake of the Fukushima event was the resounding call for intro/retrospection on the domestic deployment plans, but that was far from the nail in the coffin. The moratorium was lifted relatively quickly, and construction resumed on projects already under way within a year.
  • FCD Approval Delay - the gap was wider for new FCD approvals, which didn’t come for another 3 years when Hongyanhe Units 5&6 were given the green light; not to mention the new site approvals we’re still curiously awaiting. If FCDs were quicker to reemerge perhaps the final verdict on the 58 GWe would still be a tossup.
  •  Gen III Exclusivity – a Fukushima result which 1) in turn precludes reaching the goal with supplementary CPR1000 or other proven designs while 2) the Gen III plants continue to deal with their own delays – notable exception being the indigenous HPR1000 (knock on wood). These well-publicized supplier quality & design related delays for Flagship Gen III plants, which are the basis for the entire nuclear program going forward, are an unfortunate and unforeseen bottleneck that has significantly impacted the overall progress towards the 58 GWe. In my opinion, without these key errors, there’s no doubt that China could have easily made their goal.

With all this in mind, the question in our minds is not ‘if’ but ‘when’ will the NEA amend its projected numbers, if at all? But to keep it in perspective, the Chinese program still has been and will continue to be a major driver of life and activity within the global nuclear industry. 1 GWe behind projected targets is far from a meltdown of China’s nuclear plans, and most of the reason for falling short can be tied directly back to events outside of the authorities’ control. 55 GWe in 2020 and the prospect of becoming a world industry leader is still a big win for the Chinese nuclear program.

Chart Party: China Trends in Imported Nuclear Safety Equipment

The HAF604 certification is required for foreign firms to sell safety-grade equipment in China nuclear. Since it was first introduced in 2007, foreign companies have been required to pass through the complicated and arduous HAF604 application and review process before they can sign deals in China, or, in some cases, before they can even submit tenders.

One of the key requirements for HAF604 certification is that a foreign firm be able to secure proof of demand from two Chinese procuring parties. Also, the process for applying for HAF604 is so demanding of company time and resources that it's unlikely a foreign company would go through the hassle unless there is good reason to believe the market is receptive to their products or services. Thus, HAF604 certification trends YoY is a reasonable proxy for market demand/market opportunity for foreign firms in the Chinese nuclear space.

I pulled some data from Nicobar's HAF604 tracking spreadsheet to see if I could find some interesting trends for different products year-over-year. 2017 is excluded because we only have a partial year and I didn't want to throw off the data. Remember, each HAF604 certification is good for 5 years. A certification extension is counted as a new certificate (for example a company could be counted twice if it first obtained HAF604 in 2009 and re-certified in 2014)

For Pipes and Pipe Fittings, the data show pretty much what I expected when I started this exercise - the opportunities for foreign firms declining over time as Chinese firms achieve localization of key safety equipment. I added a red trend-line to make the YoY decline more apparent. As Chinese firms achieve higher levels of mastery for safety class piping, it will get harder and harder for foreign firms to secure their proof of demand, or see credible market opportunities that would lead to pursuing a HAF604.

The situation for HAF604 certifications of nuclear grade Castings and Forgings is similar to piping, although the trend-line is less pronounced. Notice the big grouping of companies that got certified in 2011 - these certificates all expired in 2016 but only 4 certificates were issued in 2016. This indicates that the majority of those companies certified in 2011 chose to abandon the Chinese market by 2016.

Here's where things start to get interesting. As the chart above indicates, nuclear grade Sensors have been a point of continuing strength for foreign firms in the Chinese market. Even with the total blackout of new HAF604 certs in 2016, the trend-line of HAF604 certs from 2008-2016 actually has a slightly positive slope. I have a couple theories for why this might be so:

  1. Unlike major piping systems, sensors are more prone to failure and wearing out, needing replacement during scheduled outages and overhauls, creating more market opportunities across the plant's entire lifespan
  2. Sensor technology has improved since the first sensors were installed in Chinese reactors 25 years ago and there are more opportunities for companies with advanced, cutting edge technology
  3. The technology demands for manufacturing nuclear-grade sensors are relatively higher than those demanded for piping and Chinese manufacturers have been slower to master the technology

Here's the last one, and it's the component that consistently sticks out most among safety-class equipment HAF604s: Valves and Valve Components (excluding actuators). As the data show, foreign companies have actually been more successful YoY in securing HAF604 certifications for valves, with a positively sloping trend-line from 2008-2016. There are actually MORE valve companies holding HAF604 certificates today than in the past, even as Chinese companies continue to earn HAF601 for valves as well. I surmise this phenomenon is due to a combination of the following reasons:

  1. Like sensors, valves also are more prone to wear and tear and can be swapped out during outages and overhauls
  2. Like sensors, valve technology has continued to improve since the first Chinese plants were constructed and opportunities continue to exist for companies with advanced, cutting edge tech
  3. Like sensors, the technology requirements for safety class valves have been slower for Chinese plants to master, especially for Class 1
  4. Valve types can be highly plant-specific, so it's possible that the market has become available to more foreign players as China continues to diversity its reactor types

Conclusions and other Thoughts:

  1. Don't assume Chinese localization = less opportunities for foreign firms, at least not just yet. The market forces that shape China nuclear are more subtle and complex than that. Even as Chinese firms secure HAF601 certification for key safety class components, foreign firms may continue to receive HAF604s and win work for competitive products. Some companies like SPIC even cultivate multiple vendors for the same products, just so they can avoid monopolies and stimulate R&D.
  2. Some tech is more resistant to Chinese localization efforts than others. Valves and sensors seem to have more sticking power for foreign firms than piping, forgings and castings, for instance. Of course I realize that there are many types of valves and many types of sensors, and I have collapsed them all into one type of component for the purposes of this high-level analysis. A more granular analysis would be necessary to tease out the exact types of sensors or valves than foreign firms are still finding a market for in China.
  3. This data doesn't capture one important group of foreign manufacturers: those who established manufacturing operations in China either via joint venture or via a WFOE factory. Their joint venture would be a Chinese company and would need HAF601 certification, not HAF604. It would be interesting to examine what kind of success foreign firms have had by abandoning their HAF604 efforts and going after HAF601 as a local firm instead.  

China Nuclear 2018 - Breaking the Silence

Last week on Nicobar News + Views, David examined the drought of activity China nuclear has experienced so far in 2017 and brought us to the conclusion: mid-2018 will be a key time to look out for new FCDs and plant approvals in China nuclear. Indeed, the industry has been waiting with bated breath as the AP1000 at Sanmen Unit 1 has now entered the fuel loading phase and appears to be in the home stretch for grid connection in early 2018. China's prospects for further deployment this year have unfortunately been boxed in by its sensible decision to:

  1. Elect to ONLY use 3rd generation NPP designs going forward, and
  2. To rigorously adhere to the  [Experimental -> Demonstration -> Commercial-> NOAK] process rule for deploying new technology.

Once the proof-of-concept milestone for the AP1000 technology has been demonstrated and put in the rear view mirror, what specific shoes can we expect to drop in 2018? Put another way: we've said before that the floodgates are going to open in 2018, but which plant sites are going to be part of that flood? Answering this question is the focus of the piece today, but to get there, we're first going to eliminate the FCDs that we WON'T be seeing in 2018:


Before the 2011 Fukushima accident prompted an industry-wide review of the seismic evaluations for the inland plants, China's inland nuclear power plants were just over the horizon. Notably, the inland site at Xianning/Dafan in Hubei Province had even received major equipment onsite before the project was thrown into bureaucratic limbo and the equipment was re-allocated to Xudapu. Since the construction moratorium was lifted in 2012,  there have been intermittent and frequently contradictory rumblings and rebuttals from official spokespeople as to the fate of the inland plants. The root of this apparent confusion comes from an apparent disconnect between regional governments eager to engage in site selection, pre-feasibility studies, and other such preparations in order to foster development within their local jurisdictions, while the national regulatory higher-ups seem much less certain on the inland plants.

The most recent back-and-forth salvo on this topic came earlier this year in mid-February when Wang Yiren, Vice Director of State Administration of Science Tech & Industry for National Defense & Vice Chairman of the Chinese Atomic Energy Association stated publicly “If things go well, construction of inland nuclear power stations will begin during the 13th 5-Year-Plan period” (i.e. 2016-2020). Just a month later in an interview, the assistant section chief for nuclear energy within the Chinese National Energy Commission said the industry "has no timetable" to construct inland plants during the 13th 5YP period. What we conclude from these vague statements is that even if we see inland plants by 2020, they wouldn't be any time over the next two years. Thus, we have ruled out FCDs at inland plants in 2018 (i.e. Xianning/Dafan, Pengze and Taohuajiang)


The next batch of new builds we can rule out for the time being are all of the planned Hualong 1 reactors – now being referred to as HPR1000s. While these plants are eventually going to be rolled out at an impressive clip – approximately 4-6 HPRs starting construction per year – we won’t be seeing that rate until 2020 at the earliest according to state media. And keeping in line with the tech deployment process I mentioned above, the HPR design is still within its proof of concept stage with the first commercial plants at Fangchenggang Unit 3/4 and Fuqing Unit 5/6. Since construction started on these first of a kind plants in 2015, commercial operation and the next batch of NOAK HPR approvals will have to wait until 2020 at a minimum.

So if we’re to assume that we won’t reasonably see any inland plants or NOAK HPRs during 2018 – what form will all the activity David was describing come in? Here are a few.


First, the low hanging fruit here will be the demonstration CAP1400 plants up at Shandong Province's Shidaowan site. This indigenous Chinese design was spun off from the Westinghouse AP1000 tech transfer and is stuck in the same situation as other planned Gen-III plants - it’s based on a technology lineage which hasn't ticked that crucial box for demonstrated proof of concept. Major equipment was delivered onsite as of many months ago, the site is totally prepped to begin pouring concrete, and an army of construction workers is undoubtedly prepped to roll up their sleeves as soon as the word is given. SNPTC has been whipping manufacturers in shape, pitting them against each other to produce competitive products simultaneously to see who is more capable, and conversations are underway on an international scale to export the CAP1400 to new markets – but no construction is happening. Officially, the publicized FCD for the CAP1400 Unit 1 is October 30, 2017, with the second unit to follow one year later on October 30, 2018. Originally, Sanmen Unit 1 was expected to start commercial operation in Q3 of this year, so an October FCD for the CAP1400 was originally a reasonable plan. With Sanmen now likely delayed out until early 2018, SPIC will be in a hard position: either abandon the well-publicized October FCD or abandon the proof-of-concept flowchart that China nuclear generally abides by. Our personal prediction is that we'll see CAP1400 FCD quietly pushed to 2018, but no matter whether it happens at the end of this year or the beginning of the next, the CAP1400 is going to start getting built soon.

 Other AP1000s

The people pulling strings at the top of the Chinese nuclear value chain seemed to have learned a thing or two in kindergarten - case in point they made sure that no sooner did SNPTC get its hands on shiny new toys from Westinghouse, the AP1000 technology from Westinghouse was it turned around and licensed to CGN and CNNC. Following SNPTC's successful deployment of the technology at Sanmen and Haiyang, we expect to see all three Chinese majors deploying more AP1000s at their respective sites (note that CNNC owns Sanmen, but the technical work is all being performed by SNPTC - CNNC is almost delegated to an investor role).

CGN's first AP1000s will be deployed at the Lufeng site in Guangdong and we expect to see FCD for those before the end of 2018. CNNC's first AP1000s are likely to be at Xudapu in northeastern Liaoning Province and Haixing in Hebei Province.  All of these sites are planned to eventually house 4-6 reactors, but we would expect no more than 2 to enter construction simultaneously.

Other potential approved sites for AP1000s include Sanmen Unit 3/4 and Haiyang Unit 3/4 but we get the impression from Chinese contacts that breaking ground on new sites is of higher priority.  Fangchenggang Units 5/6 are also currently slated on the books to be AP1000s and official sources estimate FCD in 2018,  but several factors make us doubt that we’ll actually see any concrete poured on those in 2018:

  • CGN is the designated site owner, and they’ll be preoccupied with their first AP1000 at Lufeng; 
  • Units 3-4 are still in early build schedule, and there’s no precedence in China for one company having 4 early stage units at the same site underway at once
  • Recently without much fanfare or notice, China has been quietly setting precedent for changing reactors that were previously planned as AP1000s to be HPR1000s instead. Zhangzhou Units 1-4 were reported as future AP1000s at the beginning of 2016 but are now indicated officially as HPR1000s, and the story is similar at Taipingling Units 1-2. Given that Units 3-4 at Fangchenggang are already housing FOAK HPR1000s, we' wouldn't be terribly surprised at all if Fangchenggang 5-6 also ended up getting switched over to HPR1000s as well, which means no FCD until 2020 or beyond.

Overall, we see a pool of 8-12 units that could get their construction license for FCD in 2018 – but to review the major assumptions we’ve made here:

  • China won’t get around to inland plant builds for at least the next 2-3 years. We think that’s a pretty safe bet, but does anyone have any convincing opposing evidence?
  • We think that there’s no real chance that China will defy its own rule here and start breaking ground on more HPRs before the first one is delivering to the grid – but what do you think?

To conclude on the idea of 2018 FCDs – 8-12 units in one year is a grueling pace but not unprecedented in China's history of new nuclear builds. After all China previously broke ground on 9 new units in 2009 and 10 in 2010. We’ll be excited to see things move at a quicker pace than they have this previous year, but it's not going to be a record breaking year. However, while we’ve been talking FCDs this whole time, maybe you picked up on from a few points that I’ve mentioned that it’s a bit of a red herring for our overseas readers who want to be participating in these projects - there's no need to be concerned about FCDs being pushed to 2019, 2020, or even beyond.  Procurement timelines are by no means slowing down – we’re seeing international RFPs and tenders going live for all of the plants we've mentioned, both those with and without near-term construction dates. Keep your ear pointed to the ground, and let us know if there's somewhere we could help.


China Nuclear 2017: It's Quiet....Too Quiet...

All things considered, 2017 has been an exceedingly quiet year for the Chinse nuclear industry.  It's already August and we've seen just 1 new reactor entering commercial operation this year:  Yangjiang Unit 4 back in March.  Once Fuqing 4 enters commercial operation as scheduled in Aug/Sept, our grand total for the year will be 2.  In contrast, 7 new reactors came online last year and 5 the year before.

Not only that, but we've seen ZERO new projects pour concrete so far this year. Again in contrast, China nuclear saw 2 FCDs (first concrete dates) in 2016 and 6 FCDs in 2015.

Heading even farther upstream, the total number of new reactors approved by China's State Council this year was also a whopping zero.  

So what's going on? Why has 2017 been such a quiet year for new plant completion, FCDs and approvals alike?

Actually the first half of the answer is pretty straightforward. To construct a CPR-1000 PWR reactor (the workhorse of the current Chinese fleet, comprising 21/36 commercial reactors in China today), Chinese industry needs 5-6 years. Subtract 6 from 2017 and you get 2011 - the year of the Fukushima accident in Japan. Unsurprisingly, there were no FCDs for China in 2011, as a moratorium on new builds was imposed and safety standards were reviewed. Indeed, the only surprising point here is that the China regulator was even able to approve pouring concrete on those 2 new reactors in 2012 just one year later (Yangjiang 4 and Fuqing 4, which will finish this year in a blazingly speedy 5 years).

The second half of the answer is actually pretty straightforward too. China simply can't start constructing any more plants until it finishes the ones its got under construction at the moment.  There are 20 plants under construction at the moment in China.  Here are the numbers:

CPR-1000 --------------------------------------------------------------- 7 units
AP-1000 ----------------------------------------------------------------- 4 units
HPR-1000 (aka Hualong 1) ------------------------------------------- 4 units
EPR ----------------------------------------------------------------------- 2 units
VVER 428M------------------------------------------------------------- 2 units
HTGR --------------------------------------------------------------------- 1 unit

We'll exclude the HTGR for now, as it's a Gen-IV demo plant.

Those 7 CPR-1000s are grandfathered into China's build plan.  The CPR-1000 is a Gen-II design and China has committed to a Gen-III future, so no more CPR-1000s will be built after the last one finishes (Tianwan 6 in 2021).

By all appearances, the VVERs are one-offs for China. Once those last two Russian reactors are completed, it's unlikely we'll see any more of this tech tree in China at Tianwan or anywhere else.

That leaves us with the EPRs, AP-1000s and HPR-1000s, all of which are demonstration projects.   Simply put, these are all Gen III options for China's nuclear build future, but the demo projects aren't finished yet, so we aren't going to see any new FCDs until we get a demonstration plant up.  With EPRs and AP-1000s both suffering from cost overruns and delays around the world, and with both WEC and Areva making their way through their well-documented financial woes, it's not hard to imagine how Chinese policymakers and industry leaders feel, having tied the fate of their highly publicized nuclear objectives to unproven Western technologies.  We witnessed the initiation of China's unsurprising efforts to free itself of overreliance on the Western firms for Gen-III technology back in 2015 when China approved construction of its homegrown Gen-III design, the HPR-1000, which has already begun supplanting former AP-1000 builds in China.

The good news that the end of this long pause is near.  The bad news is that 2017 isn't going to be the year when it all comes to fruition.  At this point in time, all of our sources are pointing to Q1 2018 as the earliest startup date for the AP-1000s and EPRs, if nothing else goes wrong.

This indicates that mid-2018 will be the key time to look out for new FCDs and approvals in China nuclear.  Indeed, we expect a veritable flood of activity to be unleashed by the confirmation that the world's first Gen-III demonstration reactors have been successfully connected to the grid in China (both in China and around the world).  2017 has been slow, for sure, but it's the calm before the storm...the tightening of a bowstring. Very soon, that storm is going to break, that arrow is going to fly, and China nuclear news is going to become a whole lot more interesting.

In our next blog post, we'll be furthering this analysis through a logical follow-up question: Which Chinese reactors are going to pour concrete in 2018? Will they be HPR-1000s, AP-1000s, or EPRs? What about inland plants? Most importantly, what will all this mean for industry stakeholders?  

Has the slowdown in new Chinese nuclear builds affected your business? What are you seeing out there? Let me know in the comments.


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