China's Nuclear Power Boom: Why It Bears Watching As Japan Melts Down

Last Updated Mar 17, 2011 9:03 AM EDT

The ongoing Japanese nuclear meltdown has world leaders scurrying to reassure voters about their own nuclear-energy operations. German Chancellor Angela Merkel suspended operations at seven of the country's 17 nuclear power plants. U.S. lawmakers -- including longtime nuclear fan Sen. Joe Lieberman -- have called for a temporary halt to a burgeoning nuclear power construction revival. And China announces it will suspend approval for new nuclear plants, pending review of new safety measures.

Here's the thing: Only China matters.

It's China -- a country in the midst of a massive nuclear power plant construction spree -- that has its thumb on the scale where the future of nuclear power is concerned.

China has 13 nuclear reactors, a tiny number compared to the 104 in the U.S. But by 2020, China is expected to increase its nuclear energy capacity tenfold to between 70 and 80 gigawatts, according to the World Nuclear Association. More than 25 reactors are already under construction and others are in the pre-construction pipeline. That will still leave China trailing the United States. But most U.S. nuclear plants are old, and fewer than 20 are even in the planning stages.

For China, it's not just about building more nuclear power plants. The real goal is to speed ahead of everyone else in technological expertise and worker know-how. That's no small feat. It takes four to eight years to train staff and even longer to create a safety culture at the operational level, according to the World Nuclear Association. Plus there's the cost -- an estimated $151 billion -- to add all of that nuclear capacity.

How to dominate the nuclear industry
China is taking two paths toward industry domination:
  • Clearing more of its own local companies like Huaneng Power to work on nuclear plants;
  • Signing technology transfer contracts with nuclear reactor builders like Westinghouse Electric, a U.S. nuclear company controlled by Toshiba of Japan.

Last year, for instance, Westinghouse won a hotly contested bid to build its third generation AP1000 reactors. But it came with a hefty price. As part of the deal, Westinghouse has handed over all of its technological information on the reactor.

This means China not only is gaining technological know-how, it also has newer, more advanced reactors than the U.S. Meanwhile, the U.S. has pretty much ignored Westinghouse's AP1000 design for years, despite claims of heightened efficiency and safety.

China also has encouraged its nuclear equipment makers to partner with foreign firms to build reactors abroad in an effort to gain that expertise. China stands to emerge as an exporter of nuclear power equipment, a development that would put competitive pressure on foreign firms like GE.

A young industry in a hurry


The enormity of China's nuclear aspirations is only part of the story. The other is a question with global implications: Can China build this many nuclear reactors in less than a decade without compromising safety or the quality of construction?

So far, China gets mixed reviews. Corruption has cropped up as the nuclear power plant construction has accelerated. Kang Rixin, a senior Party member and head of China's nuclear power program, was convicted last November in a $260 million corruption case where he was accused of rigging bids connected to nuclear power plant construction.

There are a few promising signs, however. Inside China, nuclear power is now beginning to be debated. The Global Times newspaper, owned by the Communist Party, ran an editorial:
"China has seen little debate over nuclear power safety as compared with other countries..It is questionable whether China will stick to a proper pace of nuclear power development, and maintain strictest safety standards in selecting its construction sites."
To be sure, China has no intention of changing its nuclear agenda. At the very least, though, it means the Chinese leadership is at least willing to pay lip service to safety -- and it might even signal that China is embracing a new, go-slower approach in a way that shows it hasn't been blinded by its nuclear ambitions.


Flag image from Flickr user peruisay, CC 2.0; nuclear-plant image via Flickr user Intamin10, CC 2.0

Related:
  • Kirsten Korosec

Comments

Market Data

Watch CBSN Live

Watch CBS News anytime, anywhere with the new 24/7 digital news network. Stream CBSN live or on demand for FREE on your TV, computer, tablet, or smartphone.

Market News

Stock Watchlist