Resource integration, government support vital for long-term success of overseas nuclear projects

Though last year's Fukushima nuclear disaster has influenced the development of nuclear power worldwide, there is no doubt that nuclear power is still an important resource in the clean energy plans of many nations.

While some nations are drafting plans to exit the nuclear sector, many others are looking to set up new nuclear projects. The US congress in February gave the green light for new nuclear projects in the nation, while many other nations, such as Poland, Egpyt and Turkey, have made nuclear power an important item on their planning agenda.

China recently approved its 12th Five-Year Plan (2011-15) for energy development, and two nuclear safety and development plans, in which it reaffirmed its determination to develop nuclear power. Interest is now centered on how China is planning its overseas moves, as it will have an important bearing on the future of the global nuclear power market.

The core competitiveness of nuclear power lies in innovation and intellectual property rights. In addition, China's overseas moves also face stiff competition from other countries along the entire industry chain, including power plant construction, equipment manufacturing and personnel training. Only six countries - France, the US, Russia, Japan, Canada and South Korea - have so far realized "going out" success.

After 30 years of development, China's nuclear power industry has also made certain achievements, but its core technology still lags the advanced level achieved by many others. Though several big nuclear power plants are under construction in China, the nation is yet to export any million-kilowatt nuclear power technology for commercial purposes.

After the Fukushima nuclear disaster, China's "going out" plans also faced resistance from third-generation nuclear power technology. For a long time, China has been taking a "self-oriented, Sino-foreign cooperative" path, whereby nuclear power technology continued to mature through constant practice. At present, China's top nuclear power companies are developing ACP1000, ACPR1000 and CAP1400 - three representatives of the third-generation nuclear power technology - and they are expected to emerge in the international market.

ACP1000, ACPR1000 and CAP1400 will start in 2013, and China hopes they can be put into production by 2015. By then, China will also have achieved the core competitiveness for its nuclear power "going out".

Since the third-generation technology has more advanced design concepts and higher security, the Chinese government has set it as the starting point for the "going out" process.

The process has also raised new requirements for China in terms of nuclear power equipment manufacturing, power plant construction and personnel training. Only through balanced development of the whole industry chain can the "going out" strategy be better implemented, failing which China may have to depend on other nations for core technologies.

China has some big companies such as Shanghai Electric Group, Dongfang Electric Corporation and Harbin Electric Corporation. Compared with foreign companies, they might have advantages in cost. However, bottlenecks in key parts exist.

China currently has 26 units under construction, accounting for more than 40 percent of the global total, giving it much experience in construction in the short term, especially in third- generation nuclear power construction. However, China lacks experience in building plants overseas, when different political and geographical conditions bring challenges.

Talent shortage is also an important factor constraining China's nuclear power from "going out". The current mode of nuclear power personnel training has not kept pace with the demand for nuclear power development. China will also have to take responsibility for training the personnel in the countries where they have ongoing nuclear projects or for those in the pipeline, which in itself is a big challenge.

Despite these challenges, China's nuclear power equipment manufacturing, nuclear power plant construction and personnel training should participate in overseas projects, and gain valuable experience. Cooperation with foreign institutions in international nuclear power projects without owning the core technology can only be regarded as a form of "subcontracting".

Judging from the experience of South Korea, it is clear that only active participation in overseas nuclear power projects can help bring about a qualitative rather than just a quantitative transformation. Before winning the nuclear project of the United Arab Emirates, South Korea had successfully teamed up with US firm Westinghouse on several projects.

The government is also an important factor in determining the competitiveness of China's nuclear power globally. Any challenge to the nuclear plans will affect the entire industry, and therefore the "going out" strategy should be a manifestation of national strength and will. To promote it at the national strategic level, China has to integrate resources throughout the entire industry.

Due to insufficient coordination, many nuclear power export companies remained apart in overseas expansion plans. Now, three top Chinese nuclear power companies with their own brands are planning to compete in the overseas markets. It is important for the government to make coordinated arrangements at the strategic level to help these companies.

In addition, the government should also give more loans and tax incentives for overseas nuclear projects, and give more support to independent nuclear power technology, organize research for advanced technology, and encourage enterprises to carry out innovation to achieve further breakthroughs in core technologies.

The author is director of the China Center for Energy Economics Research in Xiamen University. The views expressed here are not necessarily those of China Daily. Contact the writer at bqlin@xmu.edu.cn