Energy Policy 101 (2017) 683–691
Contents lists available at ScienceDirect
Energy Policy
journal homepage: www.elsevier.com/locate/enpol
China's nuclear export drive: Trojan Horse or Marshall Plan?$
Steve Thomas
Professor of Energy Policy, Public Services International Research Unit (PSIRU), Business School, University of Greenwich, 30 Park Row, London SE10 9LS, UK
H I G H L I G H T S
China's nuclear industry expanded fast in the last decade and is targeting exports.
Success in Europe would be a major boost to prospects elsewhere.
National security concerns must be examined before investment decisions are taken.
China's quality control and regulatory competence should be assessed.
China's modern reactor designs are untested even in China.
art ic l e i nf o
a b s t r a c t
Article history:
Received 28 January 2016
Received in revised form
12 September 2016
Accepted 14 September 2016
Available online 29 September 2016
China's civil nuclear industry expanded strongly from 2008 onwards and nearly half of reactor construction
starts worldwide since then are accounted for by the Chinese home market. Increasingly China is turning its
attention to the export market using its own designs, which it claims emulate the safety standards of the
latest designs of the established nuclear reactor vendors. Its export efforts would be greatly strengthened if it
were to win an order from an established user of nuclear power and its best opportunity appears to be the
UK where it is at the early stages of negotiating the construction of nuclear reactors. The financial collapse of
the French nuclear company, Areva, gives it the opportunity to take a stake in the rescued companies giving it
access to important fuel cycle technologies and perhaps the large French reactor service market. Its other
export prospects in Europe are in Romania and Turkey. There are a number of issues European governments
need to examine before committing to allow in Chinese nuclear companies. These include national security
concerns about dependence on China for key infrastructure, issues of quality control and regulatory competence and the lack of construction experience with China's modern reactor designs.
& 2016 Elsevier Ltd. All rights reserved.
Keywords:
China
Nuclear power
Exports
Europe
National security
1. Introduction
After a period of rapid expansion of nuclear capacity in China in
the past decade, China is looking to use its expertise to spear-head an
export drive for its nuclear reactors. It has a particular advantage over
☆
On September 15, 2016, the British government said that it had completed its
review of the Hinkley Point project announced in July 2016 and had decided that
the project should go ahead. The result of the review was that the UK government
would take a ‘special share’ (usually known as a golden share) in nuclear projects
after Hinkley Point (it was said to be too late to require this for Hinkley Point). This
would give them right of veto over changes in ownership of nuclear plants. The
Bradwell project would be covered by this policy but was not mentioned in the
announcement. A golden share appears irrelevant to the reported concerns behind
the review of industrial espionage, leakage of military technologies and Chinese
control over major infrastructure. It seems unlikely that this requirement will be a
major barrier to Chinese investment in the UK nuclear power sector. However,
there remain several major hurdles to jump before construction of Hinkley can
proceed.
E-mail address: [email protected]
http://dx.doi.org/10.1016/j.enpol.2016.09.038
0301-4215/& 2016 Elsevier Ltd. All rights reserved.
all other nuclear exporting countries, except Russia, through its
ownership of the companies and its ability to marshal all aspects of
the economy especially the financial sector to support its industries.
To be successful in this export drive, it needs credibility and for
many potential markets the ability to provide low-cost finance.
The prestige gained from exporting to a country with a strong
existing nuclear capability would be valuable. Exports to USA, Japan and Russia appear implausible in the medium-term so Europe
and, especially the UK, is a key market to crack. Importing reactors
from China raises policy issues that must be addressed before any
commitment is given. These include national security concerns,
the safety of the designs and quality control of the components.
In this paper, we set out the history of the civil nuclear power
programme in China, we review the main nuclear companies including their technologies, their ordering history, their target
markets and their strategic alliances with European, Japanese and
US nuclear companies. We then review the potential scale of the
European market and the strategies these companies are pursuing
684
S. Thomas / Energy Policy 101 (2017) 683–691
in the European markets and finally we examine the main policy
issues raised by China's attempts to export its nuclear technology
to Europe. We pay particular attention to the UK and France as
these are the markets which would carry most prestige and where
efforts for Chinese companies to enter are most advanced.
2. Literature review
There are major problems in writing about China's nuclear industry because of the lack of up to date independent analysis.
Most of the detailed articles in journals and books, for example,
Ramana and Saikawa (2011), Zhou et al. (2011), Zhou and Zhang
(2010) and Yi-chong (2010) were written before the Fukushima
disaster, which marked a major policy change in China and do not
reflect the major technological and corporate changes to the Chinese nuclear industry that have occurred from 2013 onwards. King
and Ramana (2015) provides useful and up to date analysis. This
article draws heavily on the trade press, especially nuclear newsletters with correspondents based in China. China's nuclear export
ambitions mean that senior officials in government and companies
feel the need to provide reliable and honest answers to questions
from such correspondents because the audience for such publications includes their potential customers.
3. China's civil nuclear programme and its industry structure
3.1. History of China's nuclear power programme
China carried out its first nuclear weapons test in 1964, but
its exploitation of civil nuclear power came later.1 Tables 1–3
summarise China's reactor programme. It was not until 1985
that construction work began on the first reactor, a small
(300 MW) indigenous design of Pressurised Water Reactor
(PWR)2 designed by the Shanghai Nuclear Engineering Research
and Design Institute (SNERDI), which was established in 1970.
This was supplied by China National Nuclear Corporation
(CNNC), a long established company with expertise in weapons
and submarines as well as power reactors.3 In 1978, China
reached agreement with France to buy two reactors for the Daya
Bay site but it was not till 1987 that their construction started.
The reactors, each with an output of about 950 MW, were supplied by Framatome (renamed Areva NP in 2002) using its M310
design, with construction managed by the French national utility, Electricité de France (EDF). The Chinese partners became a
new state-owned company, China Guangdong Nuclear (CGN)4 in
1994.
Reactor ordering was slow in the period 1987–2007. CNNC
produced a larger indigenous PWR design, the CNP-600, first
construction start in 1996, and imported two heavy water reactors
of Canadian design in 1998. Two more imported French reactors
were built in 1997 in collaboration with CGN. However, both CNNC
and CGN were building up their design expertise and in 2005,
construction was started on a Chinese version of the M310, the
CPR-1000.5 In 2008, construction work took off with six reactors
1
Data on construction and operation of reactors are all taken from the International Atomic Energy Agency's PRIS data base. https://www.iaea.org/PRIS/home.
aspx (accessed 12.08.16.).
2
The PWR is the most widely used type of reactor worldwide accounting for
about two thirds of the world's operating reactors.
3
http://www.cnnc.com.cn/tabid/643/Default.aspx (accessed 15.12.15.).
4
http://www.cgnpc.com.cn/n1500/index.html (accessed 15.12.15.).
5
Both the CGN and CNNC versions of the M310 are designated CPR-1000 although there are differences between the two. The CNNC version of the M310 is
also sometimes known as the M310 þ.
Table 1
China's nuclear power plants in service.
Source: IAEA PRIS database https://www.iaea.org/PRIS/home.aspx
Technology Supplier
No of
units
Capacity
(MW net)
Construction
start
First power
CNP-300
M310
1
4
288
3760
1985
1987 1997
1991
1993 2003
6
2
3160
1354
1996 2010
1998
2002 2016
2002 2003
2
1980
1999 2000
2006 2007
15
5
35
15229
6000
31771
2005 2010
2008 2010
2010 2016
2014 2016
CNP-600
CANDU
AES-91
CPR-1000
CPR-1000
Total
CNNC
Framatome/
CGN
CNNC
AECL
(Canada)
Rosatom
(Russia)
CGN
CNNC
Table 2
China's nuclear power plants under construction.
Source: IAEA PRIS database https://www.iaea.org/PRIS/home.aspx
Technology Supplier
No of
units
Capacity (MW
net)
Construction start
AP1000
EPR
CPR-1000
CPR-1000
HTR-PM
ACPR-1000
HPR-1000
HPR-1000
Total
4
2
3
1
1
4
2
1
18
4000
3320
3000
1000
200
4000
2000
1000
18520
2009 2010
2009 2010
2012 16
2012
2012
2013 2015
2015
2015
West/SPIC
Areva/CGN
CNNC
CGN
Huaneng
CGN
CNNC
CGN
Table 3
China's next new-build projects.
Source: Nuclear Intelligence Weekly ‘Nine projects top priority list’ May 16, 2016, p 5
Site/province
Capacity Design
Owner
Approval
expected
Rongcheng/
Shandong
Haiyang/Shandong
Sanmen/Zhejiang
Lufeng/Guangdong
Xudapu/Liaoning
Ningde/Fujian
Zhangzhou/Fujian
2 1500
CAP1400
SPI
2016
2 1250
2 1250
2 1250
2 1250
2 1150
2 1087
AP1000
AP1000
AP1000
AP1000
HPR-1000
HPR-1000
Changjiang/Hainan
2 1087
Haixing/Hebei
2 1087
SPI
CNNC
CGN
CNNC/Datang
CGN/Datang
CNNC/
Guodian
HPR-1000 CNNC/
Huaneng
?
CNNC
2016/17
2016/17
2016/17
2016/17
2016/17
2017/18
2018
2018
beginning construction (four CGN and two CNNC) based on the
CPR-1000 design. In 2009 and 2010, ten more reactors of this
design started construction.
The M310 design dates back to the 1960s, having been licensed by Framatome in the early 1970s from Westinghouse,
and by 2006, the Chinese authorities acknowledged more
modern designs were needed. Its plan was to select one of the
advanced designs on offer importing a few reactors initially but
progressively transferring the technology so it could be supplied
by Chinese companies. Two technologies were seriously considered, the EPR supplied by Areva and the AP1000 supplied by
Westinghouse, which was owned by Toshiba.6 In 2007 the
6
Westinghouse's nuclear division was sold to the state-owned UK company,
BNFL in 1999 for $1.1bn who in turn sold it to Toshiba in 2006 for $5.4bn. http://
www.toshiba.co.uk/innovation/NEWSARCHIVE/archived_news_article.jsp?
ID¼ 0000006709 (accessed 14.07.16.).
S. Thomas / Energy Policy 101 (2017) 683–691
AP1000 was chosen with four reactors ordered and a new
company created, State Nuclear Power Technology Company7
(SNPTC), re-named State Power Investment Corporation (SPIC)
in 2015 (see below), to indigenise the technology. SNERDI became a subsidiary of SNPTC giving it established expertise. In
2008 two orders were placed for EPRs with CGN partnering
Areva and EDF for this project.
The Chinese vendors began to produce their own advanced
designs using imported technology from their existing partners as
the basis: CGN developing the ACPR-1000, CNNC the ACP-1000
and SPIC the CAP1400. The ACPR-1000 and the ACP-1000 are developments of the French M310 design while the CAP1400 is a
scaled up AP1000. The technology license agreement for the
AP1000 is reported to stipulate that any derivatives of the AP1000
with output larger than 1350 MW would be SPIC's intellectual
property.8
The ordering spurt from 2008 was achieved with relatively
little public debate and participation (Guizhen et al., 2014). This
lack of scope for public participation should not be seen as a lack
of public opposition. For example, in July 2016, the government of
Lianyungang, a city near the coast of Jiangsu Province, said that it
had halted any plans to build a nuclear fuel reprocessing plant
there after days of strong public protest.9
The Fukushima disaster coincided with a dramatic slowing of
ordering with construction starts on only four reactors in the next
four years. How far this was due to a reassessment of technology
as a result of Fukushima and how far it was down to other factors,
such as overstretching of resources is difficult to tell. In 2015,
construction started on six reactors all of advanced design but it
was not until September 2016, that the first construction start on a
new reactor took place that year.
In 2012, China set itself a target to have 58 GW of nuclear capacity in operation by 2020 with a further 30 GW under
construction.10 This target does not appear achievable given that
in August 2016, it had only 30.4 GW of nuclear capacity in operation with 20.5 GW under construction and constructions starts
appeared to have largely stalled again with only 17 GW of capacity
short-listed for construction start by 2018 (see Table 3). A potential
barrier to expansion of nuclear capacity beyond 2020 is that the
Chinese State Council has approved only CGN, CNNC and SPIC as
nuclear developers. The vast majority of generating capacity in
China is owned by five other large generation companies11 but
they were allowed only to take a minority stake in nuclear
projects.12 These rules were under review in 2015. In 2015, SNPTC
merged with the smallest of the big five Chinese generation
companies, China Power Investment Corporation (CPIC) to form
the State Power Investment Corporation (SPIC) increasing its financial strength for exports and giving it a potentially larger home
market. Despite several announcements forecasting the imminent
construction start for the first CAP1400, by August 2016, this had
not happened.
Another barrier to expansion is that all the orders by September
2016 and all the short-listed projects were for coastal sites. If nuclear power is to expand dramatically in China, inland sites will
have to be developed and there is significant opposition to this
happening (King and Ramana, 2015). Following the Fukushima
7
http://www.snptc.com.cn/en/(accessed 18.12.15.).
Nuclear Engineering International ‘Power plant design - China - Developments in Chinese reactor technology.’ March 2016, p 30.
9
International New York Times ‘Chinese city withdraws nuclear plan after
protests’ August 12, 2016.
10
Nuclear Engineering International ‘China – News update - Steady and safe’
December 2012.
11
State Power Investment Company, Huaneng, Datan, Huadian and Guodian.
12
For more details, see Nuclear Intelligence Weekly ‘Beijing Mulls Widening
Circle of Majority NPP Owners’ December 12, 2015, p 3.
685
disaster, the Chinese government prohibited construction of reactors at inland sites. The main concerns were the lack of sufficient
water to mitigate the effects of a serious accident and the devastation to land and to inland waterways an accident would cause
compared to a coastal site where much of the radiation would land
in the sea. In 2015, the ban on developing coastal sites was under
review (Yu, 2015a) but by August 2016, no decision had been taken.
It had become clear soon after construction start that the EPR
and the AP1000 were probably too expensive to form the basis of
Chinese orders. In 2013, the Chinese government required CNNC
and CGN to ‘merge’ their advanced designs (ACP-1000 and ACPR1000) to produce the Hualong One design (HPR-1000). Four reactors of the CGN ACPR-1000 started construction and CNNC announced it had won an order for two reactors using the ACP-1000
design for Pakistan, although the design is now generally described as HPR-1000. Construction work started on this in August
2015. Even though they were required to merge their designs to
form a single one, it is now clear that CGN and CNNC have their
own versions of the HPR-1000 with their own supply chain. It
appears the two versions of HPR-1000 are little more than renamed versions of the ACP-1000 and the ACPR-1000 rather than
any significant attempt to merge the designs and there remain
significant differences between the fuel assemblies and between
the safety systems (Yu, 2016).
In December 2015, CNNC and CGN announced the creation of a
joint venture, Hualong International Nuclear Power Technology Co
(Yu, 2016) This would be: “a powerful force to the integration and
development and market expansion of HPR 1000 and boost the
landing in more countries and regions of the technology [sic]”. It is
not clear how far this move will lead to the merger of the two
separate HPR-1000 capabilities or whether it will simply be a
figurehead company with CGN and CNNC continuing to pursue
their own separate markets. Attempts to decide which version
would be the one chosen for a unified design were stalled in August 2016.13
China has also been developing high temperature gas-cooled
reactors since the mid-80s via a technology license for German
pebble bed technology. This work has been led by Tsinghua University which completed a 10 MW prototype plant (HTR-10) in
2000. It set up a joint venture with China Nuclear Engineering
Corporation (CNEC) and Chinergy, and is building twin 105 MW
reactors at the Shidao Bay site, which in 2016 were expected to be
completed in late 2017. Whether this will result in a commercially
viable technology remains to be seen.
By end 2013, the three Chinese reactor vendors had target export markets: CGN was competing in UK, Romania and Kenya;
CNNC was competing in Argentina, Algeria and Sudan; and SPIC
was competing in Turkey and South Africa. This export drive is
backed by Chinese financial institutions. The China Development
Bank (CDB) and the Export and Import Bank of China are supporting state-backed companies, with CDB offering governmentto-government low interest loans to Argentina and Algeria for
their nuclear programmes as well as loans to CGN for the UK's
Hinkley Point project. The Industrial and Commercial Bank of
China has agreed to offer loans of €10 billion to support CGN's
nuclear project in Romania (Yu, 2015b).
3.2. The Chinese nuclear companies
8
3.2.1. CNNC
The Chinese National Nuclear Corporation is the longest established and most broadly based of the Chinese nuclear
13
Nuclear Intelligence Weekly ‘CNNC and CGN Stalemated Over Hualong-One
Design’ August 12, 2016, p 6.
686
S. Thomas / Energy Policy 101 (2017) 683–691
Table 4
Sales of CNNC reactors.17
Source: Author's research
Design
Units sold Output MW Construction
start
CNP-300
CNP-600
CANDU-6
CPR-1000
HPR-1000
ACP-1000
5
6
2
8
2
1
310 340
650 660
728
1080
1087
1080
1985 2011
1996 2010
1998
2008 2016
2015
2015
Commercial
power
Partner
1994 2002 2002 2003
2014 –
–
–
–
AECL
–
–
–
companies. It was originally the Second Ministry of Machine
Building, then the Ministry of Nuclear Industry and reorganised to
become CNNC in 1988. It makes no secret of its military roots and
continued military connections. Its web-site states14: “Historically,
CNNC successfully developed the atomic bomb, hydrogen bomb
and nuclear submarines and built the first nuclear plant in the
main land of China. CNNC is the main body of the national nuclear
technology industry, the core of the national strategic nuclear
deterrence and the main force of the national nuclear power development and nuclear power construction, and shoulders the
duel [sic] historical responsibilities for building of national defence
force, increasing the value of state assets and developing the
society.”.
Despite this strong historic position, CNNC seemed to lose out
to its rival, CGN, in the burst of orders from 2008 to 2010
(See Table 4). It only supplied six of the 22 CPR-1000 reactors, CGN
was the chosen partner for Areva for the Taishan project and by
end 2015, CNNC had started construction on only three reactors
using its advanced designs compared to five for CGN. Of the nine
reactor projects (each for two reactors) shortlisted by China for
development from 2016 to 18, only three projects are for HPR1000s, two of which are expected to be supplied by CNNC (see
Table 3).15 In May 2016, CGN stated that it had agreed not to
compete with CNNC for business in export markets with CGN focusing on Europe.16
3.2.2. CGN
China Guangdong Nuclear was formed in 1994 and renamed
China General Nuclear in 2013. This allowed it to reflect its aspirations as a global company whilst retaining its established acronym. As argued above, by 2015 it seems to have achieved a
somewhat stronger position than CNNC (see Table 5) despite its
more recent origins and as a provincial rather than as a national
company.18 How far this position is down to superior technical
expertise, its early experience with the Daya Bay project and the
location of many of the nuclear projects in regions of China, the
South East, where CGN is strong is difficult to determine. However,
of the nine reactor projects (each for two reactors) shortlisted for
development from 2016 to 18, only one is for CGN HPR-1000s (see
Table 3). The Taishan project, in which it was the Chinese partner
to Areva, to build two EPRs has gone badly and by 2016, it was at
least three years late. In August 2016, China was forecasting first
power from unit 1 in early 2017 and in unit 2 by end 2017.
3.2.3. SPIC
The State Nuclear Power Technology Company (SNPTC) was
created in 2007 incorporating the long-established design expertise of SNERDI to be the partner to Toshiba for indigenising
Toshiba's AP1000 technology. It merged with a large utility, China
Power Investment Corporation (CPIC) to form the State Power
Investment Corporation (SPIC) in 2015.19
When the AP1000 was chosen in 2007, it was forecast that the
AP1000 would quickly take over from the CPR-1000 as the basis
for orders for China.20 Like the Taishan project, the AP1000 projects have gone badly and are 3–4 years late (see Table 6) but many
of the problems seem to be caused by Toshiba. However, experience with construction of the AP1000s has led to serious doubts
that this design could be built cheaply enough to form the basis of
Chinese ordering. Despite repeated claims that construction would
start soon on the first CAP-1400, by August 2016, this had not
happened leaving SPIC well behind CGN and CNNC with its advanced reactor design. Of the nine reactor projects shortlisted for
development from 2016 to 2018, five are for AP1000s and only one
is for CAP1400s (see Table 3). In May 2016, an official of SPIC said:
“It's no longer clear” which design will be selected for “the future”
of the Chinese fleet and a decision over whether the CAP1400 will
be exclusively for exports also “is in flux.”21 Export customers
would be concerned if there were no home orders about buying a
technology not demonstrated in its home market. It would gain
little strategically from CGN winning a reactor order in the UK
other than that it would demonstrate that a Chinese company
could satisfy an experienced and rigorous regulatory body.
4. China's nuclear export strategy
Despite its limited experience, China has a number of important expected advantages over the established vendors based
in Japan, France and Russia22:
1. There was an assumption that Chinese reactors could meet
standards required by experienced, developed country markets
at lower cost than its competitors;
2. The high rate of ordering for its home market gave it scale
economies and a large skilled workforce that its competitors
could not rival;
3. The huge financial reserves of the Chinese government meant
that its vendors would be able to provide finance as well as
equipment, a big advantage in most potential markets;
4. Its competitors, Areva and Toshiba/Westinghouse, had serious
financial problems while international sanctions and the collapse of the Rouble meant that Russia was unlikely to be able to
provide the financial support it had been expected to give its
vendor, Rosatom.
The first and second assumptions are hard to test because of
the difficulty of getting reliable cost data from China, the lack of
experience with modern designs and the lack of much operating
experience. In Appendix 1, we review the available data
(see Tables 7 and 8). We conclude that the record of China in terms
of construction and operation is good if not outstanding.
The third advantage relies on the existence of a centralised
14
http://www.cnnc.com.cn/tabid/643/Default.aspx (accessed 18.12.15.).
Nuclear Intelligence Weekly ‘Nine projects top priority list’ May 16, 2016, p 5.
Nuclear Engineering International ‘China's CGN and CNNC agree not to
compete’ June 2016. http://www.neimagazine.com/news/newschinas-cgn-andcnnc-agree-not-to-compete-4907664 (accessed 28.08.16.).
17
Tables 1–3 only include reactors on which construction had started by January 2016
18
http://www.cgnpc.com.cn/n1500/index.html (accessed 15.12.15.).
15
16
19
http://www.snptc.com.cn/en/index.php?optionid ¼911 (accessed 19.08.16.).
http://www.snptc.com.cn/en/(accessed 18.12.15.).
Nuclear Intelligence Weekly ‘Weekly Round-up’ May 20, 2016, p 1.
22
The two longest established reactor vendors were originally US companies,
Westinghouse and GE, but the Westinghouse reactor division is now owned by
Toshiba (Japan), while GE's reactor business outside the USA is run by the HitachiGE joint venture which is 80% controlled by Hitachi (Japan).
20
21
S. Thomas / Energy Policy 101 (2017) 683–691
687
Table 5
Sales of CGN reactors.
Source: Author's research
Design
Units sold
Output MW
Construction start
Commercial power
Partner
M310
CPR-1000
EPR
ACPR-1000
HPR-1000
4
16
2
4
1
984
1080
1750
1087
1087
1987 1997
2005 2012
2009 2010
2013 2015
2015
1994 2003
2010 –
–
–
Framatome
–
Areva
–
–
Table 6
Sales of SPI reactors.
Source: Author's research
Design
Table 8
Construction time and operating performance of CNP-1000 reactors by year.
Source: IAEA PRIS database. https://www.iaea.org/PRIS/home.aspx (accessed
15.08.16.)
Units sold Output MW Construction
start
AP1000 4
1250
2009 2010
Commercial
power
Partner
–
Toshiba
Table 7
Construction time and operating performance by vendor and model.
Source: IAEA PRIS database. https://www.iaea.org/PRIS/home.aspx (accessed
15.08.16.)
Vendor/model
No of
units
Mean construction
time (months)
Lifetime load factor (%) (no of
units)
CNNC/CNP-300
CNNC/CNP-600
Fram/M310
CNNC/CNP-1000
CGN/CNP-1000
CANDU 6
Russia V-428
AP1000
EPR
1
6
4
5
15
2
2
4
2
109
56
68
71
68
55
87
96
96
82.3 (1)
87.5 (4)
86.7 (4)
–
83.4 (6)
91.5 (2)
87.2 (2)
–
–
Other post-2000
programmes
Korea
India
Russia
6
6
5
66
80
100
78.7 (4)
74.5 (6)
–
Notes
1. For China, includes all reactors in service by August 2016 except for AP1000 and
EPR. Construction time for AP1000 and EPR are based on the estimates in August 2016.
2. Lifetime load factors include only reactors that have completed at least two
calendar years of commercial operation.
3. For Korea, India and Russia, Table 4 includes reactors on which construction
started in or after 2000. Only one of the five reactors from Russia was in service
by August 2016 and the construction times are based on the estimates in August
2016.
4. Construction time is calculated as time from pouring first structural concrete to
commercial operation
5. Load factor is calculated at the output of the plant in kWh as a percentage of the
output it would have produced had it operated uninterrupted at full power
output.
planned economy in which the government has strong control
over all aspects of the economy and with a high degree of public
ownership. Of the major economies, only China and Russia have
this capability. Russia has ambitious nuclear export plans with
more than 30 claimed orders for new nuclear reactors but the
Year construction
start
No of
units
Mean construction
time (months)
Lifetime load
factor (%)
2005
2006
2007
2008
2009
2010
1
1
1
6
5
6
57
62
70
68
75
67
84.1 (1)
87.5 (1)
79.2 (1)
88.3 (3)
–
–
weak state of its economy means it is unlikely it will have the
financial capability to support more than a small fraction of these
orders. Most OECD countries would not try to exert the degree of
control China has. France is often seen as a country with a commitment to mobilise all French resources to support its nuclear
industry. It controls the utility, EDF, the reactor vendor and fuel
cycle company, Areva and has, in the past granted export credit
guarantees on a small scale for reactor exports. However, the financial weakness of Areva and EDF and financial measures France
had to impose following the 2008 world financial crisis mean it
does not have the scope to offer the ‘one-stop shop’ capability for
reactor orders that China appears capable of providing. Japan was
considering a more coordinated approach to reactor exports in
2010 offering export credit guarantees and coordinating its vendors but the Fukushima disaster may mean this will not happen.
By 2015, Chinese vendors were competing in markets in almost
every continent. Historically, sales in countries with relatively weak
economies are seldom realised, in part because of the difficulty of
raising the huge amount of finance needed. To put the scale of investment in perspective, it is worth noting the plan to build just two
Areva EPRs in the UK would make it the most expensive civil project ever carried out in Britain.23 China's prospects, especially those
of CGN, would be considerably enhanced by the prestige winning
an order in a large developed country in Europe with a long history
of nuclear power exploitation would give. The most likely such
market is the UK, where, in 2015, one of its three reactor vendors,
CGN, announced preliminary agreement to build a nuclear power
plant in the UK. Elsewhere in Europe, Chinese reactor vendors are
competing for business in Romania (CGN) and Turkey (SPIC). The
financial collapse and the proposed break-up of the French nuclear
group, Areva, gives Chinese companies the opportunity to take
equity stakes in the resulting companies with long established expertise in areas China would like to build up, such as reactor design,
uranium enrichment and spent fuel reprocessing.
23
The Telegraph ‘Hinkley: a truly major national scandal’ September 26, 2015.
http://www.telegraph.co.uk/comment/11893698/Hinkley-a-truly-major-nationalscandal.html (accessed 12.01.16.).
688
S. Thomas / Energy Policy 101 (2017) 683–691
4.1. Opportunities in Europe
In 2016, there were about ten countries in Europe seriously considering new reactor orders (for a review of European market prospects, see Schneider and Froggatt (2016). However, of these, six are in
Eastern Europe, (Czech Republic, Slovakia, Hungary, Romania, Bulgaria
and Poland) a region where orders have long been discussed but have
consistently been postponed, usually due to problems of finance. Of
these, only Poland has a large enough electrical system to be able to
accommodate more than one or two reactors. There appears to be the
political will for new reactor orders in France and Finland but nuclear
power already meets such a large proportion of electricity demand in
both countries, there is little scope for further orders. Only in the UK
and Turkey is there both political backing and scope for a significant
number of reactors.
Until the Chinese companies had designs that they could claim
were their own Intellectual Property (IP), they could not enter the
export market because the owners of the IP, Toshiba/Westinghouse
and Areva, were not willing to allow China to export these designs.
The market for China's small designs, CN-300 and CNP-600 is minimal.
The Chinese vendors claim they own the IP for their new designs,
HPR-1000 and CAP1400, which became available from about 2013
onwards allowing China to enter the export market. There are few
credible markets for nuclear power in the world so they are not in a
position to pick and choose which markets they compete in. The three
companies do not compete against each other in the same export
market and their export activities are coordinated, but not allocated by
the China Atomic Energy Authority (CAEA) and the National Development and Reform Commission.
4.1.1. The UK
The most strategically important opportunity in Europe is the
proposal to build HPR-1000 technology at the Bradwell site. In October
2013, a deal was announced by EDF to build two EPRs at the Hinkley
Point site and potentially two further EPRs at the Sizewell site.24 The
consortium to own the plants was not finalised then but Chinese involvement was confirmed with CGN and CNNC expected to take up to
40 per cent of the company between them. In October 2015, more
details and some modifications to the deal were announced with
CNNC no longer mentioned and CGN's stake 33.5 per cent.25 Subsequently, CNNC said it still expected to be a partner with CGN in the UK
but it was implied it would provide only finance and was leaving
negotiations to CGN.26 The Chinese stake in the Sizewell project was
reduced to only 20 per cent but a new element was that EDF would
release its Bradwell site to CGN for the construction of its HPR-1000
technology with it taking 66.5 per cent of the consortium and EDF the
rest.27 The first step will be for CGN to submit its HPR-1000 design to
the UK safety regulator, the Office of Nuclear Regulation (ONR), to
undergo Generic Design Assessment (GDA). This is an exhaustive
process taking four years or more aimed at ensuring all generic design
issues are resolved for any project, leaving only site-specific issues for
individual projects.28 Before this process can start, CGN will have to
24
https://www.edf.fr/sites/default/files/contrib/groupe-edf/espaces-dedies/
espace-finance-en/investors-analysts/events/special-announcements/agreement_
reached_on_commercial_terms_for_the_planned_hinkley_point_c_nuclear_power_
station.pdf (accessed 21.12.15.).
25
http://www.edfenergy.com/energy/nuclear-new-build-projects/hinkleypoint-c/news-views/agreements-in-place (accessed 21.12.15.).
26
The Telegraph ‘Second Chinese company poised to invest in Hinkley Point’
May 7, 2016 http://www.telegraph.co.uk/business/2016/05/07/second-chinesecompany-poised-to-invest-in-hinkley-point/(accessed 20.07.16.).
27
http://en.cgnpc.com.cn/n1017152/n1017227/c1141640/content.html
(accessed 21.12.15.).
28
The EPR received generic design approval in 2012 after five years of review.
The AP1000 was submitted in 2007. The process was interrupted by the vendor in
2011, but re-opened in 2014. In August 2016, completion was not expected before
2017. See http://www.onr.org.uk/new-reactors/assessment.htm (accessed 28.08.16.).
produce a complete, detailed design and the ONR says it expects to
receive the design in 2016 for review. However, the HPR-1000 design
still seems to be evolving as CGN's and CNNC's designs are merged so
it may take a couple of years before the design is stable and detailed
enough to be submitted. The project is therefore at a very early stage
and the CGN press release does not specify any target dates or even
how many reactors are planned for Bradwell. In May 2016, an EDF
spokesman said it was “very early days” in the development of the
proposed power plant29 and by August 2016, the HPR-1000 design
had not been submitted to ONR. There were also serious doubts as to
whether the Hinkley Point project would proceed amongst other
things because of the financial collapse of Areva and opposition to the
deal within EDF to the deal because of the financial strain it would put
on EDF (Thomas, 2016). The completion date of the Hinkley project
has continually slipped. In 2010, EDF was forecasting first power in
2017, but by 2016, first power was not expected before 2026.
After six years of claiming a Final Investment Decision (FID) for
Hinkley was imminent, EDF took an FID on July 2830 with the
expectation that an Investment Agreement with the UK government, committing the UK to the project would be signed the following day. However, only hours after the EDF Board took the FID,
the UK government unexpectedly announced that the project was
under review, at the instigation of the newly appointed UK Prime
Minister, Theresa May. The government was not explicit about the
rationale for the review, but press reports centred on concerns
about national security.31 If the Hinkley deal does collapse, the
future of the whole UK nuclear programme including Bradwell
will be in doubt. The GDA process for any reactor design cannot
start without explicit UK government approval for a reactor vendor to submit its design to ONR so if the UK government decides
not to go ahead with Hinkley it might not approve the submission
of the HPR-1000. However, if CGN and CNNC could get a Design
Acceptance Certificate from the ONR for a unified HPR-1000 design, even if Bradwell does not proceed, this would be a huge
advantage in markets with less experienced regulatory bodies.
4.1.2. France
Areva was created in 2002, primarily from the reactor vendor
Framatome and the nuclear fuel cycle company, Cogema and these
two companies formed the main divisions of Areva, Areva NP and
Areva NC respectively. It is about 87 per cent owned by the French
state. In March 2015, Areva announced losses for the fifth consecutive year, this time of €4.8bn and it was clear the group could
not continue without major restructuring. The French government
has been trying to broker a rescue which would involve essentially
splitting it up into its constituent parts. Areva NP is responsible for
most of the losses and there are also huge potential liabilities,
perhaps in excess of €10bn, from the four EPR reactors under
construction, two in China, one in Finland and one in France. Given
that Areva NP is valued at less than €3bn, any rescue plan will
inevitably require new investors to be insulated from these liabilities, which will have to be borne by French taxpayers.
Nevertheless, the opportunity to take an equity stake in the rescued companies represents a major opportunity for the Chinese
companies to gain expertise, technologies and access to markets.
The French government is requiring EDF (about 85 per cent
29
In January 2016, a spokesman for CGN said the design would be submitted to
the UK regulator in June 2016. Nucleonics Week ‘Bradwell B remains at early stage:
EDF, regulator’ May 12, 2106, p 1.
30
https://www.edfenergy.com/energy/nuclear-new-build-projects/hinkleypoint-c/news-views/FID (accessed 19.08.16.).
31
May's joint chief of staff, Nick Timothy had written in 2015: Rational concerns about national security are being swept to one side because of the desperate
desire for Chinese trade and investment. http://www.conservativehome.com/the
columnists/2015/10/nick-timothy-the-government-is-selling-our-national-secur
ity-to-china.html (accessed 19.08.16.).
S. Thomas / Energy Policy 101 (2017) 683–691
state-owned) to take a 75–80 per cent stake in a new reactor
vendor company with a reformed Areva parent company holding
no more than 25 per cent. EDF would look to sell on some of its
stake leaving it with at least 51 per cent of the shares. The main
candidates for these share are CGN and the Japanese company
Mitsubishi Heavy Industries (MHI). In June 2016, a memorandum
of understanding was signed by MHI and EDF to strengthen cooperation between the two companies foreseeing: “the potential
participation of MHI as a partner in the French nuclear landscape
reorganization with the acquisition of a minority equity interest in
AREVA NP.”32; Areva NP has been developing a reactor design,
Atmea One, through a joint venture with MHI, Atmea SAS, since
2007 and this has competed in a number of markets with the best
prospect of success in Turkey and Vietnam. Under the terms of the
joint venture, both parties have agreed not to compete against
Atmea One with their own mid-sized (about 1000 MW) reactor
design. It seems likely that if MHI does take a stake in Areva, this
will preclude a stake in Areva by CGN and if EDF/Areva chooses
Atmea One as its preferred mid-size reactor design, the Bradwell
project and the scope for cooperation between EDF/Areva and CGN
would be limited.33
The deal to rescue Areva's reactor division will be complex with
EDF carrying out a rigorous due diligence and negotiating hard to
minimise its exposure to losses. In July 2016, the European Commission announced it would be carrying out an in-depth investigation to determine whether the rescue breaks EU state-aid
legislation.34 It gave no time-table for completion of this investigation but it may mean completion of the rescue will not be
possible, if at all, before 2018.
A more immediate prospect is that CNNC will take a stake in
Areva's fuel cycle business, Areva NC, and in November 2015, a
memorandum of understanding was signed by the French and
Chinese presidents likely to lead to CNNC taking a minority stake
in Areva's fuel cycle business.35 China has long had aspirations to
complete the fuel cycle by acquiring reprocessing technology using
the plutonium recovered in fast reactors (Bunn et al., 2016). These
plans met a hostile public response in the Lianyungang, a city near
the coast of Jiangsu Province where a reprocessing plant was
planned, and the plans were blocked by the city.
France's nuclear power plants start to reach their fortieth
birthday, the end of their design life, in large numbers from 2017
onwards. If EDF is able to life-extend these plants, a stake in Areva
NP could give CGN access to a significant and prestigious market
carrying out the upgrades required to life-extend them. The French
Court of Auditors estimated that life-extension and upgrades required as a result of Fukushima would cost about €74bn between
2016 and 2030.36 A stake for CNNC in Areva NC would give it access to additional technologies, uranium reserves and markets.
4.1.3. Romania
While the Bradwell project is much more strategically important for CGN, the project to build a reactor using the Canadian
CANDU design in Romania is a more immediate prospect. The
Cernavoda project dates back to an agreement in 1979 between
Romania and the Canadian reactor vendor, Atomic Energy of
32
https://www.edf.fr/en/the-edf-group/dedicated-sections/press/all-press-re
leases/mitsubishi-heavy-industries-and-edf-sign-memorandum-of-understandingon-collaboration-in-civil-nuclear-power-businesses (accessed 20.07.16.).
33
Nuclear Intelligence Weekly ‘EDF's Balancing Act Between MHI and CGN’
July 8, 2016, p 4.
34
http://europa.eu/rapid/press-release_IP-16-2587_en.htm (accessed
20.07.16.).
35
http://www.areva.com/EN/news-10655/areva-and-cnnc-considering-in
depth-partnership-with-capitalistic-and-industrial-components.html
(accessed
22.12.15.).
36
Power in Europe ‘CdC ups EDF investment forecast’ February 15, 2016.
689
Canada Limited (AECL), to supply five reactors for Cernavoda. The
first unit was completed in 1996, the second in 2007 and since
then Romania has been trying to fund construction of a third and a
fourth unit. In 2008, an international consortium involving five
large European utilities37 reached agreement with the state controlled Romanian nuclear generation company, Nuclearelectrica, to
build these two units. However, by 2013, all five of these utilities
had withdrawn leaving Nuclearelectrica with all the shares in the
project.
In 2013, Nuclearelectrica announced agreement with CGN to
complete two CANDU reactors at Cernavoda at an estimated cost
of €4bn.38 The project company will be a joint venture in which
CGN will own at least 51% of the share capital. Construction was
expected to start in three years with completion expected a further six year later. However, by June 2016, the joint venture between Nuclearelectrica and CGN had yet to be set and construction
start was still 2–3 years away.
This project is more advanced than Bradwell and the fact that
reactors of this design are already in operation at the site should
reduce the risk of delay from the regulatory process. However, the
fact that five large European utilities all walked away from this
project does suggest it is still financially risky. CGN is also inexperienced with CANDU technology, the two CANDUs in service
in China being built and operated by CNNC.
4.1.4. Turkey
Turkey has attempted several times over the past 35 years to
launch a nuclear power programme but all attempts came to
nothing until 2010 when a deal was agreed with Russia to buy four
reactors for the Akkuyu site. This was followed up with a deal to
buy four reactors for the Sinop site from MHI in 2013 using Atmea
One technology. In November 2014, Toshiba/Westinghouse, SPIC
and the Turkish state-owned generation company, EÜAS announced they were in exclusive talks to buy four reactors, two
using the Toshiba/Westinghouse AP1000 design and two using
SPIC's development of this technology, the CAP1400, to be built at
an as yet unidentified site.39 Construction start was forecast for
2018/19 (O’Byrne, 2014). However, the talks have not progressed
well with apparent tensions between Toshiba/Westinghouse and
SPIC as to who should lead the talks, concerns in Turkey that it
would be buying a ‘first-of-a-kind’ with the CAP1400 and difficulty
assembling the financial package Turkey would need.40 By July
2016, it was reported that the talks were no longer exclusive with
Turkey open to offers from other vendors. The deal with MHI
appears to be just as problematic. The Russian plant was expected
to start construction in 2011 when the deal was announced but by
2016, construction start was still said to be a couple of years away.
5. Issues raised by Chinese nuclear investment in Europe
Despite its huge recent order book, China's nuclear industry
remains an unknown quantity. This is because China's nuclear
experience is essentially only in China and it is difficult to get
reliable, independent information from China. The concerns are
therefore inevitably somewhat speculative.
37
GDF Suez (France), CEZ (Czech Republic), RWE (Germany), ENEL (Italy) and
Iberdrola (Spain).
38
http://www.world-nuclear-news.org/NN-Nuclearelectrica-owners-approveChina-agreement-26101501.html (accessed 22.12.15.).
39
Business Wire ‘Westinghouse Inks Multi-Party Agreement to Develop Nuclear Power in Turkey’ November 24, 2014.
40
Nuclear Intelligence Weekly ‘Wither Westinghouse and SPI? ’ July 22, 2016, p 4.
690
S. Thomas / Energy Policy 101 (2017) 683–691
5.1. Regulation
The Chinese safety regulator faces a workload unprecedented
anywhere in the world. As of August 2016, it has to oversee the
operation of 35 reactors, the construction of 20 reactors and the
commissioning of the first units of two new designs (EPR and
AP1000). More significantly for the export market, it is carrying
out ‘first-of-a-kind’ (FOAK) reviews on five new reactor designs.41
A regulator carrying out a FOAK has a particular responsibility as it
cannot rely on the work of other reviewers and other regulators
will usually build on the work carried out in the FOAK review.
Many of China's target markets outside Europe have no history of
building and operating power reactors and their regulatory capability is undeveloped. Such countries will have to rely heavily on
analysis by the Chinese safety regulator and if this analysis proves
inadequate and, in a worst case, leads to a significant accident, the
credibility of the Chinese nuclear industry in export markets including Europe will be seriously damaged (see Wübbeke and Ting
(2016)).
There are concerns that the China's National Nuclear Safety
Administration (NNSA) is struggling to meet its workload. In 2014,
Stephane Pailler, head of international relations at France’s Autorité de Sûreté Nucléaire (ASN) said: “We don’t have a regular relationship with the Chinese on EPR control like we have with the
Finnish.”42; Philippe Jamet, one of the French regulator’s five
governing commissioners, testified before French Parliament in
February 2014: “Unfortunately, collaboration [with China] isn’t at a
level we would wish it to be. One of the explanations for the
difficulties in our relations is that the Chinese safety authorities
lack means. They are overwhelmed.”.43
5.2. Quality
In March 2014, EDF’s internal safety inspector Jean Tandonnet
published his annual report to the utility’s chief executive that
detailed a mid-2013 visit to the Taishan building site. He wrote
that “the state of conservation” of large components like pumps
and steam generators at Taishan “was not at an adequate level” and
was “far” from the standards of the two other EPR plants in Finland
and France.44 In 2015, referring to the prospects for Chinese nuclear power plant exports, a senior expert at China’s SPIC said:
“Our fatal weakness is our management standards are not high
enough. There is a big gap with international standards.”45 As with
regulatory capacity, countries with little nuclear experience will
have to rely more heavily on China's quality control than on their
own capability.
5.3. National security and connections to military technology
5.3.1. The UK
Concerns about national security and military connections are
seldom clearly articulated because of the political sensitivities they
raise. They are a particular factor for the UK market and France
because of the capabilities with military connections these countries possess. There is also a more general concern about ownership of key infrastructure, such as power stations, in the hands of a
41
HPR-1000, CAP1400, ACP-1000, ACPR-1000 and a High Temperature GasCooled Reactor design.
42
http://www.bloomberg.com/news/articles/2014-06-18/french-nuclear-reg
ulator-says-china-cooperation-lacking (accessed 12.01.16.).
43
Ibid.
44
Energy Monitor Worldwide ‘China regulators ‘overwhelmed’ as reactor
building steams ahead’ June 21, 2014.
45
http://www.firstpost.com/fwire/made-in-china-nuclear-reactors-a-toughsell-in-global-market-2140127.html (accessed 6.03.15.).
country that is viewed with suspicion.
In October 2015, The Times (O’Neill et al., 2015) reported:
“Senior military and intelligence figures have warned ministers
that plans to give China a big stake in Britain's nuclear power industry pose a threat to national security.” There is particular concern that if CNNC is involved in the consortium, this will give it
access to some of UK's technologies with military applications,
such as reprocessing spent fuel to extract plutonium and enriching
uranium to increase the proportion of material that could be the
basis for a nuclear weapon.
In November 2015, the UK Commons Defence Committee expressed concerns about whether letting Chinese interests to control
a sensitive piece of infrastructure was wise. It concluded: “Whilst
foreign investment in capital projects has a positive impact on the
UK economy, such investments may open up vulnerabilities in our
infrastructure. The resilience of our critical national infrastructure is
vital for UK defence and security and we expect the SDSR [Strategic
Defence and Security Review] robustly to address this potential
danger” (House of Commons Defence Committee, 2015).
Professor Helm (2015), a well-known economist who has served
as a member on various UK government bodies stated: “Add in the
military and security issues of letting Chinese state-owned companies into the heart of the British nuclear industry, and it seems
positively perverse to prefer Chinese government money to British
government money in so sensitive a national project.”.
It seems clear worries within government about these issues
were over-ruled by Prime Minister Cameron and the Chancellor of
the Exchequer, George Osborne. Both left office in July 2016 after
the referendum on the UK's membership of the European Union
(EU) came out in favour of leaving the EU. Cameron's successor,
Theresa May, was reported as long having had reservations about
the Hinkley deal and in July 2016, as discussed above, placed a
hold on signing the Investment agreement pending a review of the
project. The government did not say what issues it was particularly concerned about but the media appeared to have been
briefed that it was the involvement of China that was behind the
review. Her advisor, Nick Timothy, had warned in October 2015
that “Security experts – reportedly inside as well as outside government – are worried that the Chinese could use their role to
build weaknesses into computer systems which will allow them to
shut down Britain's energy production at will”.
The more specific threat seems to be about industrial espionage
in general and would apply in equal measure to any major infrastructure project. The former Chancellor, George Osborne was reportedly keen to get Chinese involvement in the UK's high speed
rail proposal (HS2), a project of comparable scale to Hinkley Point.
Whether Chinese involvement in this project will be subject to
review under the new regime remains to be seen. The issue of
industrial espionage was given particular point by the charging in
the USA of one of CGN's advisers with conspiring to help the
Chinese government to develop nuclear material in a manner that
breaches the law - a euphemism for spying.46
Whether the threat posed by Chinese ownership of strategic
infrastructure is realistic is not clear – Bradwell would account for
only a small fraction of the UK's generating capacity. Equally, it is
not clear whether the UK's dual civil/military technologies of potential interest to China such as reprocessing are of any value. The
UK's reprocessing plants are old, have been technologically problematic and are expected to close by 2019, before CGN would be
in a position to make an investment decision for Bradwell. The
issue therefore seems to be one of industrial espionage.
46
2016.
The Times ‘Chinese spies are biggest threat to nuclear power deal’ August 13,
S. Thomas / Energy Policy 101 (2017) 683–691
5.3.2. France
The issues of national security would appear much more serious for France than for the UK. If Chinese companies were to invest in re-launched parts of Areva, this would give China direct
access to most of France's civil and military nuclear technologies.
Through servicing, it would also give China a role in maintaining
and servicing France's 58 reactors, which supply about three
quarters of France's electricity. However, by August 2016, there
was no sign that concerns about Chinese companies’ role in rescuing Areva were playing an important role in the debate about
Areva's future. It may be that, as in the UK, when the proposals are
more concrete or when there is a different political regime, these
concerns will come to the fore.
6. Conclusions and policy recommendations
The nuclear industries of Europe and China are at a critical
point in their evolution. For Europe, the number of countries actively looking to pursue new nuclear programmes is confined to
the UK, Finland, Turkey and France plus a few Eastern European
countries and it may that only a handful of orders will be placed in
the next decade or two. Of these potential markets, only the UK,
Turkey and Romania are seriously considering China as supplier.
The future of the reactor market in Europe may be near the point
of no return and if orders are not placed soon, the nuclear option
will be abandoned. Specifically, if the economics of nuclear power
do not improve dramatically, more countries are likely to follow
Germany's example and replace their nuclear capacity with
cheaper renewables and energy efficiency measures.
The UK is the key reactor market in Europe for China and a sale
to the UK could be the catalyst for other sales to Europe. However,
there are many serious obstacles to overcome before the Bradwell
project can proceed. The opportunity presented by the failure of
the French nuclear company, Areva, also gives China the prospect
of strengthening its technical capability and perhaps playing an
important role when and if France decides to replace or life-extend
some of its existing nuclear fleet which begins to reach the end of
its design life from 2017 onwards.
From a European policy point of view, China is potentially an
attractive supplier of nuclear plants because of the expectation of
low costs, the large amount of recent experience of construction
and operation that exists in China and because of the likely
availability of finance from China. Ironically, the degree of coordination and support the Chinese government is able to give to
its nuclear industry would be totally contrary to European Union
competition rules.
There are concerns about quality, the rigour of the Chinese
regulatory system and the national security issues raised by allowing China to control such a sensitive piece of infrastructure. For
the UK, the issue of national security seems to be the dominant
one in its review of the Hinkley project. The judgement that will
have to be made is whether allowing China in would be a good
way to provide much needed technology and capital to modernise
key national infrastructure or a threat to national interests through
the opportunity for China to control key assets and the opportunities for industrial espionage it would open up. These three issues, national security, quality and safety culture are ones that
every government considering allowing Chinese companies into
its home market needs to consider carefully before any commitment is made.
691
For China, its nuclear industry is reaching the point where it
can attempt to enter export markets as an independent player. It
has formidable advantages in the strength of the Chinese economy
and the degree of control ownership of the companies gives it.
However, its nuclear industry is still young and its ability to produce its own innovative designs that will satisfy the demands of
experienced nuclear power plant users rather than just copy existing designs remains unproven. Its ability to build reactors
quickly, cheaply and operate them reliably is also unproven outside China. More fundamentally, it is far from clear that the market
for nuclear reactors in Europe and beyond that would be open to
Chinese exports will be large enough to be worth pursuing.
If the world market for nuclear reactors does not pick up, China
may judge its efforts are better spent in less problematic sectors.
Despite the scale of China's nuclear programme, nuclear power
only accounts for 3 per cent of its electricity, so while it may be
that the world nuclear industry needs China for it to have a future,
it is not clear whether China needs and can afford nuclear power.
Appendix A. Supporting information
Supplementary data associated with this article can be found in
the online version at http://dx.doi.org/10.1016/j.enpol.2016.09.038.
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