Research Report of Chinese Nuclear Power Industry, 2009

The energy demands and energy saving & emission reduction are the double pressures for the fast development of Chinese economy. The nuclear power, however, is the most competitive solution to change Chinese energy structures and meet the energy demands.

By the end of 2008, total 11 nuclear power generating sets had been in operation with the total installed capacity of 9.07 million kilowatts, accounting for 1.3% of the total installed power capacity. The annual nuclear power production was 68.394 billion KWh, accounting for 2% of the total power production in the country.

The nuclear power production in 19 countries all over the world accounts for more than 25% of the total power production, including 76.8% in France, 19.4% in America and 27.5% in Japan.

Compared with the thermal power, the nuclear power in China still has no price competitiveness. On the one hand, it attributes to the comparatively low price of the coal. The statistics shows that the investments in the thermal power are about 4 thousand Yuan (580 USD) per kilowatt, but it needs 10 thousand Yuan (1.46 thousand USD) per kilowatt for the nuclear power, 6 thousand Yuan (880 USD) differences. On the other hand, it spends more time on constructing the nuclear power, which takes about 70 months, but the thermal power takes about 30 months. The expense of the nuclear power and the low exploitation costs and economical usage of the coal resources lead to long-term dependency of Chinese energy system on the thermal power.

It needs to realize the production in large scale so as to cut down the costs of the nuclear power. The performance of the nuclear power equipments is 30 years’ longer than that of thermal power equipments and the cost composition makes it competitive in the later period. The investments in the nuclear power fixed assets costs 50 to 60 percent of the total investments or higher, but the thermal power only accounts for 30 to 40 percent. The nuclear fuels cost 20% of the total investments, which is 50% or higher for the thermal power. Meanwhile, for the operation costs, the nuclear power occupies 15% of the total costs, but 10% for the thermal power. Because of the giant fuel costs of the thermal power, the costs of the nuclear power are comparative low after depreciation allowance.

Meanwhile, there is no definite direction for the technical route choice of Chinese nuclear power, which is also an important factor affecting the nuclear power construction process in China. The present nuclear power technologies in China, including French technologies in Dayawan nuclear power plant, Russian technologies in Tianwan nuclear power plant and Canadian technologies in the third phase of Qinshan nuclear power plant, have not formed standard systems for far. The time and costs spent on the nuclear power technologies and the achievements in China are far behind those in France, Japan and South Korea.

Apart from the costs and choice of the technical route, the fuel supplies and the safety of the nuclear power will also face the challenges. Because of the limited natural uranium reserves in China and the strict LAFA supervision over the uranium mine trade, China’s uranium mine import from Australia and Canada etc is involved in the complicated international political and military relations. Besides, in order to guarantee the safety, the construction and operations of the whole nuclear power plant need to take the power demands, population density and hydrogeology into consideration.

From 4-trillion-Yuan (570 billion USD) domestic demands expansion issued by Chinese government in the end of 2008 to 580-billion-Yuan (84.6 billion USD) electrical investment plan to cope with the international financial crisis and Adjustment and Revitalization Plan of Equipment Manufacture, the development of Chinese nuclear power receives wide attentions.

Chinese government plans to the installed capacity of the nuclear power in China will reach to 5%, the electrical power production will reach to 8% and the installed capacity of the nuclear power exceeds 70 million kilowatts by 2020. If calculation by the installed capacity of 70 million kilowatts in operation in 2020 and 10 million kilowatts capacity in process, the investments in Chinese nuclear power construction total 720 billion Yuan (105 billion USD) in 10 years.

In accordance with the previous experiences, the investments for purchasing the nuclear power equipments account for about 40%. Generally, the proportion of the investments in nuclear power equipment, conventional island equipment and the auxiliary equipment is 6:3:1. According to the 40% equipment investments in the total investments, the investments in Chinese nuclear power equipments will be about 288 billion Yuan (42 billion USD) from 2009 to 2020. The huge investments will provide opportunities for Chinese and international nuclear power equipment manufacturers.

At present, the fight of international nuclear power equipment giants in Chinese market has changed into the technical route competition. In China, the most disputable topic is to adopt which generation nuclear power technology, the second, the semi-second or the third. If choosing the semi-second technology, it is obvious far behind. But if choosing the third generation technologies, represented by EPR of Framatome and AP1000 of Westinghouse, it is much more disputable, because no nuclear power plant has been constructed in the world at present, which adopts the third generation technologies. People highlights the development of the nuclear power, but it also faces the technical route choice, the place choice of the coastal nuclear power plant shifting to the inland.

In the beginning of 2009, the Dafan nuclear power project in Hubei Xianning had passed through approval from Chinese government. Meanwhile, three nuclear power plants are planning to be constructed in Xishui, Yangxin and Zhongxiang in Hubei, in which the Xishui nuclear power projects have submitted the Development and Reform Commission of P.R. of China. Also, the nuclear power project plans in Hunan and Sichuan etc have been on the agenda. The nuclear power enclave process in China is gradually speeding up and there will be a great mass fervor of nuclear power construction.

On 3rd April, 2009, the two biggest enterprises in Chinese nuclear power industry, China Nuclear Engineering Group CO and Guangdong Nuclear Power Holding Co., Ltd, signed a civil engineering contract of 8 nuclear power sets in Jiangsu Yangzhou, which have been the largest quantity and the most amount civil engineering project in Chinese nuclear power construction history. In accordance with the agreement, China Nuclear Industry Huaxing Construction Co. Ltd, the affiliated company of China Nuclear Engineering Group CO, will undertake the civil engineering of 8 nuclear island sets with the contract amounts exceeding 5 billion Yuan (800 million USD), which is involved the civil engineering of 8 nuclear island sets in three nuclear power plants, including Zhejiang Ningde, Guangdong Yangjiang and Guangxi Fangchenggang. 

The huge investments in Chinese nuclear power industry also provide investment opportunities for Chinese and global equipment manufacturers, fuel dealers, construction dealers and operators.

This report analyzes Chinese nuclear power industry from the aspects of government policies, power demands, supplies, nuclear power equipments, project construction and operations. It is of high reference values for the investors to be familiar with the present situation of Chinese nuclear power industry and master the investment opportunities.

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