China to beat 2020 nuclear targets after projects restarted -CNNC

Wed Mar 12, 2014 4:39am EDT

* CNNC to seek IPO to raise up to $3 bln for expansion plans

* China could build 20 new nuclear plants in next six years

By Matthew Miller and Yan Huang

BEIJING, March 12 (Reuters) - China is set to beat its 2020 targets for nuclear power, the chairman of the country's top nuclear firm told Reuters, after getting back on track with projects that had been halted after Japan's Fukushima disaster.

Beijing is undertaking the world's biggest expansion of civilian nuclear power as the government aims to increase its use of cleaner energy. At the same time, China is seeking to expand its power grid by as much as 80 percent over this decade.

The expansion plans were suspended in 2011 following the earthquake and nuclear disaster at Fukushima, Japan, but are now back on track as construction on new plants is expected to resume with approvals granted in the coming months.

"Nuclear plants will play an important role in reaching the government's 2020 goal of raising the proportion of energy produced by non-fossil fuel to 15 percent," said Sun Qin, chairman of China National Nuclear Corp (CNNC), in an interview on the sidelines of China's National People's Congress.

China will surpass its goal of having 58 gigawatts (GW) of installed nuclear power capacity by the end of the decade, said Sun, adding that the country may build 20 or more nuclear reactors in the next six years.

In 2013, non-fossil fuel accounted for nearly 10 percent of China's primary energy consumption.

CNNC, which has listed its uranium resources arm CNNC International Ltd in Hong Kong, is also preparing to raise as much as $3 billion for its expansion plans through an initial public offer in Shanghai, as other media has reported.

"The amount of money raised will depend on market conditions," said Sun. "I hope it can be done this year."

EXPANSION PLANS

China's premier Li Keqiang said last week that China will start construction of a number of hydropower and nuclear power projects in his first government work report delivered to the annual meeting of the country's mostly rubber-stamp parliament.

China now gets less than 2 percent of its electricity from 17 nuclear reactors.

Thirty-one additional units are under construction, including a pair of AP1000 reactors located at Sanmen in Zhejiang province. CNNC is building the two reactors there with U.S.-based Westinghouse - owned by Japan's Toshiba Corp - and they are expected to be operational by next year.

The CNNC chairman said that the Zhejiang power project, which was originally scheduled to start up last year, was delayed due to equipment and design issues.

"If these two reactors go smoothly, we will follow with more," Sun said.

CNNC has also relaunched preparation on inland projects, which were halted following Japan's Fukushima disaster and that will still need another two or three years before the government will grant approvals for them, according to Sun.

China is expected to approve 4 to 6 nuclear power units during the current five-year plan ended in 2015, followed by 6 to 8 units per year in the 2015-2020 plan.

CNNC, which was carved out of the country's old nuclear ministry, is one of the country's biggest central-government controlled conglomerates and maintains strong military links.

The group, alongside state-owned China General Nuclear Power Group (CNPG), has been looking to internationalize its technologies and designs, many of which were developed with Westinghouse and Areva SA.

Last year, CNNC was contracted to build two reactors for the Karachi Coastal Nuclear Power Project in Pakistan. Beijing has committed $6.5 billion to finance construction of the $9.59 billion undertaking.

In December, CGNP and CNNC jointly took a minority stake in the 16 billion pound ($26.60 billion) Hinkley Point project in Great Britain in a consortium led by French utility EDF .

Sun dismissed concerns about CNNC's government origins and military links.

"I think Chinese nuclear power going overseas is purely commercial behaviour," he said. "Foreign nuclear firms have come to China, and Chinese firms also go abroad." ($1 = 0.6014 British pounds) (Additional reporting by David Stanway in Beijing; Editing by Tom Hogue)

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