China struggles to fuel its nuclear energy boom
* China's nuclear capacity build-up ahead of schedule
* Urgent need to develop new mines for the longer term.
* China does not see uranium supplies as an obstacle
By David Stanway
BEIJING, Dec 10 (Reuters) - China is driving ahead with an ambitious programme to expand its atomic energy capacity over the next decade, raising questions about its ability to find the uranium it will need, at home or abroad.
Total capacity reached 9.1 gigawatts by the end of 2008, and the government fully expects to hit its official 40 gigawatt target well before the 2020 deadline.
China currently operates 11 reactors and has 17 under construction, but has 124 more on the drawing boards, according to industry group the World Nuclear Association (WNA).
The expansion programme will cause its demand for uranium to rocket 10-fold by 2030, making it the world's second biggest consumer of the radioactive metal following the United States, according the WNA forecasts.
Zhang Guobao, the country's senior energy official, has repeatedly stated that China intends to raise the bar "by a large margin", and those in the know believe it should easily smash its existing targets.
Pan Zhiqiang, director of science and technology at the China National Nuclear Corporation (CNNC), one of the country's two major state-owned nuclear developers, said last month that "reaching 70 GW before 2020 will not be a big problem." [ID:nPEK128796]
"There are also estimates that by 2030, total capacity will reach 200 gigawatts, and by 2050, 1,000 gigawatts," he said.
Concerns have been raised about the availability of sufficient fuel to feed the growing demand in China and elsewhere, but Pan discounted any immediate problems.
He claimed there was "absolutely no problem" finding the uranium to run 40 gigawatts of capacity, either within China's borders or through overseas acquisitions.
Over the longer term, however, others concede that acquiring enough of the key ingredient in nuclear power generation could be a big challenge.
"The uranium market in the future faces a lot of uncertainties with not a small supply shortage," said Zhou Zhenxing, who heads the uranium development unit at the China Guangdong Nuclear Power Corporation (CGNPC), the second of China's big nuclear firms.
RAISING THE BAR
When China announced in a 2006 policy document that it would aim for 40 GW of nuclear capacity by 2020, sceptics noted this meant finding the wherewithal to bring at least two reactors into operation every year. They also pointed out plans were already behind schedule, with no new projects due until 2011, and bureaucratic problems had already delayed others.
But momentum was quickly regained. China had 11 reactors in operation by the end of last year, using a variety of "second-generation" designs from Russia, Canada and France as well as its own research institutes, and there are now another 24 -- with 25.4 GW of capacity -- approved or under construction.
U.S.-based Westinghouse Electric, now owned by Toshiba (6502.T) is building four of its new AP1000 reactors in coastal Zhejiang and Shandong provinces, securing a much-needed showcase for its untested "third-generation" designs. In exchange, China was granted a generous technology transfer agreement that would make the AP1000 the model for its own "localised" reactors.
Meanwhile, France's Areva CEPFi.PA agreed to build two of its European Pressurised Reactors for the Taishan nuclear project in southeast China's Guangdong. [ID:nPEK162095]
China's own nuclear contractors are already looking well beyond the 40 GW target, with Zhou of CGNPC saying his company was already planning to increase capacity to 34 GW by 2020, up from the current level of 3.94 GW.
For a FACTBOX on China's nuclear power plants and plans, click on [ID:nPEK248165]
With every province and region keen to grab a stake in the lucrative nuclear sector, both CGNPC and CNNC have been scouring the country for potential projects. Every province along the eastern coast is building new reactors, and a multitude of cities in China's interior are also lobbying to become the country's first inland nuclear plant.
The need to feed such growing capacity has required the two state-owned giants to hunt the globe for new sources of fuel -- with CGNPC chasing uranium reserves in Kazakhstan, Uzbekistan, Australia and Namibia, and CNNC signing deals to explore and develop in Mongolia and Niger.
China has been developing its own uranium mines since the 1950s, mainly in the remote northwest. But total output is a state secret, and it is unclear whether it will be enough to power the dozens of reactors due to go online before 2020.
According to figures from the China Nuclear Industry Association, China has currently developed only a third of the uranium required to fuel 40 gigawatts of capacity by 2020, and exploration needs to be stepped up if China wishes to avoid being exposed to the volatile foreign market.
"The exploitation rate of Chinese uranium mines is actually very low right now, so there is room to improve the supply volume," said He Kun, a professor at the Nuclear and New Energy Technology Research Institute at Tsinghua University.
Zhou of CGNPC said his company alone would need more than 10,000 tonnes of uranium per year by 2020.
With CGNPC likely to control about half of China's nuclear capacity by then, that would put total annual demand at around 20,000 tonnes, a massive increase on the 769 tonnes produced in 2008, according to World Nuclear Association estimates.
Pan of CNNC conceded that there was an urgent need to develop new mines for the longer term.
"Uranium supplies don't constitute an obstacle to the development of nuclear power in China, but we must strengthen our prospecting work, and our research into prospecting technologies. This is absolutely crucial."
Pan said the supply problem has been overstated, however, noting that both Japan and South Korea have managed to keep their reactors running despite having no uranium of their own.
"Uranium is a commodity and we can import it, and also participate in international uranium mining projects. People say that uranium isn't very plentiful, but I don't agree."
For a TAKE A LOOK on uranium, click on [ID:nGEE5B81RO] (Reporting by David Stanway, Editing by Eric Onstad and Hans Peters)
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