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China Energy Delivered

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.