How Nuclear Power Can Rebalance China’s Energy Mix
Nuclear development stalled in China after the Fukushima accident, but domestic technologies are finally ready to power the country’s next generation of reactors.
Nuclear power has enjoyed a global resurgence over the past year, as energy ministries around the world confront the harsh reality of 2022’s cripplingly high coal and gas prices. Countries like Germany that had previously stated their intentions to phase out nuclear have been forced to add it back into their decarbonization planning, while some countries that had previously sworn off the nuclear option entirely have put it back on the table.
China too, is planning a large nuclear buildout, although the unstable fuel markets of 2022 haven’t had much of an impact on its long-term nuclear plans, which were always aggressive. China already has the second-largest civil nuclear power sector in the world, in terms of power supplied to the grid, after the United States. For coastal Chinese provinces like Guangdong and Fujian, which are relatively poor in renewable resources, nuclear power is a key source of stable, low-carbon power with nearly zero emissions, competitive generation costs, and limited exposure to international fuel markets. Although the scale of China’s nuclear power sector remains small compared to other generation types, comprising just 5% of the country’s power consumption in 2021, it is still a critical piece of the low-carbon puzzle as China eyes its ambitious decarbonization goals.
Today, there are 54 commercial nuclear power reactors operating in China, all located in smaller towns and cities near the ocean. Another 26 reactors are currently under construction, with dozens more in the long-term construction pipeline. If you live in Shanghai, Shenzhen, or Guangzhou, there’s a good chance you are currently consuming power generated by a nearby nuclear power plant. Overall, China suffers from a severe mismatch of power demand and power supply; the most industrialized and energy-hungry provinces lie along the eastern coast, while the most abundant power generation resources are in the far north, west, and southwest. Ultra-high voltage lines can carry power from western to eastern China, but this option is costly, and the line paths are difficult to site. This leaves nuclear as one of coastal regions’ best options for meeting rising power demand with affordable, dispatchable, low-carbon power.
Despite these inherent positives, the development of China’s nuclear sector has not been smooth. In the late 2000s, when China had just a few reactors, planners drew up aggressive plans for the mass deployment of nuclear power across the country. Planning documents from this time talked about installing 70 gigawatts by 2020 and 120 GW by 2030. (A single modern reactor produces approximately 1 GW, sufficient to meet the power needs of roughly 1 million typical electricity customers).
While these numbers pale in contrast to the installed capacity base of coal, which exceeded 1,000 GW in 2020, the plans were nevertheless ambitious considering the low starting level at the time. They called for the mass deployment in both coastal and inland provinces, with a mixture of Chinese indigenous and imported technology. Together with hydropower, nuclear would comprise the backbone of China’s low-carbon baseload capacity additions.
Instead, new nuclear power generation has largely undershot those goals. Total nuclear capacity was just 51 GW by 2020, and China is now targeting just 75 GW by 2025. Meanwhile, coastal provinces are still approving tons of coal-fired capacity. What happened?
The first, and most important, reason for the delay was the 2011 Fukushima nuclear accident in Japan, caused by the loss of plant power due to an earthquake and tsunami. Immediately after the accident, China’s nuclear safety regulator — the National Nuclear Safety Administration (NNSA) — ordered a moratorium on all new nuclear construction until domestic safety standards could be revaluated and enhanced.
When construction was finally allowed to continue, a few key things had changed. First, all inland plant construction was suspended, a situation that has persisted to this day. Even now, there are dozens of planned nuclear sites in Hunan, Sichuan, Jiangxi, and other inland provinces, some with completed onsite buildings and earthworks and even equipment delivered, unable to continue construction. Second, the NNSA determined that older “Generation II” (2G) plant designs should be scrapped in favor of newer safety-enhanced “3G” plants. This meant relying on imported technologies, as China was yet to develop its own 3G intellectual property.
By the end of the 2010s, several things had become apparent to Chinese policymakers and energy planners: First, imported designs from the U.S. and France were taking longer to build and were costing a lot more than initially budgeted. Second, the trade war with the U.S. exposed Chinese nuclear developers to supply chain risks via their American suppliers. Third, and most importantly, the indigenous Hualong One reactor technology had achieved design maturity and commercial viability, with the construction of pilot plants moving ahead on time and within budget. In response to this new reality, many reactor sites that were previously expected to use foreign technology were switched over to indigenous designs instead. Now, the industry was stuck waiting for its indigenous reference plants to finish construction before more could be built.
The reference plant milestone was finally reached back in January 2021, when the first domestic Hualong One reactor began commercial operations in Fujian. Since then, there’s been a flurry of new construction and site approvals in coastal provinces, with some provinces like Shandong targeting as many as 12 new reactors in their provincial Five Year Plans. Still, valuable time has been lost over the last decade. The pause on nuclear development left significant space for coal plants to be built instead. The nuclear plants being approved now won’t connect to the grid for least 5 years, more than twice the time needed to build a new coal plant.
Beyond the longer build schedule, Chinese nuclear plants face other obstacles. As with any nuclear power industry around the world, the country must figure out a long-term disposal option for waste, particularly the spent nuclear fuel that comes out of the reactor at the end of the operating cycle. China’s policy for nuclear fuel is “closed cycle,” which means the fuel should be reprocessed and partially recycled for reusable components before the leftovers are buried in a deep geological repository. The reprocessing and storage facilities are yet to be built, however, so plants continue to store their spent nuclear fuel onsite in spent fuel pools or dry cask storage.
Another issue is that the NNSA has still not allowed the construction of inland plants to resume, which means the development of the nuclear fleet remains limited to coastal areas. Any grid that uses a lot of renewable energy must have an option for firm dispatchable power as backup when the sun isn’t shining, or the wind isn’t blowing. Batteries or hydro can serve this purpose, but battery capacity is limited, while hydropower’s development is dependent on natural geography. Low-carbon nuclear is an ideal backup for low-carbon wind or solar. China’s inland regions are blessed with abundant wind and solar resources, but if they aren’t able to use nuclear power for backup, then dispatchable thermal energy like gas or coal will end up being used in its place. Eventually, inland construction must be restarted if nuclear is to play its full potential role in supporting renewables and decarbonizing the Chinese grid.
Yet another challenge is the sheer volume of construction the sector needs to scale up over the next few decades. Nearly all energy mix planning or roadmap documents from credible institutions envisage nuclear playing a significant role in meeting China’s long-term decarbonization goals, although they rarely agree on just how significant. The majority of forecasts call for somewhere between 200 and 550 GW of capacity by 2050, or between 5% and 28% of China’s total power consumption, with the average of 10 influential studies on the topic clocking in at 16.6%.
This would require the construction of more than 10 plants per year, every year, for the next four decades. That is a significant increase over the 3 to 4 reactors a year pace we see right now. This will undoubtedly create massive demands on all other parts of the system, from the equipment supply chain, to human resources, to regulatory capacity. While it’s not impossible for China to overcome such a challenge, it would be reassuring to see the industry break ground on 10 new reactors in a year just once, to show that it can be done, before committing to a long-term plan that assumes such a pace can be maintained for decades.
Regardless of whether the eventual total is 150 reactors or 500, nuclear will have an important role to play in China’s long-term decarbonization planning. Being fuel-secure, insulated from most weather-related disruptions, scalable, affordable, and low-carbon, it meets all the criteria needed to earn a spot in China’s fuel mix. Perhaps even more crucially, China currently lacks any other options for a mature, low-carbon power source with enough growth potential to provide the dispatchable backup generation that wind and solar require, which is why nuclear’s role in China’s power sector is unlikely to diminish.
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