China's Nuke Power to Embrace a New Era

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Last updated at: (Beijing Time) Friday, August 29, 2003

China's Nuke Power to Embrace a New Era

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The nuclear power construction, which has been frozen for six years, was relaxed somewhat early this year: At the working meeting of the Premier of the State Council held on January 29,2003, a plan for constructing four nuclear generating units valued at US$6 billion was passed in principle. Related development plans made by the National Development and Reform Commission (hereinafter referred to as NDRC or its predecessor the State Development Planning Commission) show that by 2020 the domestic installed capacity of nuclear power will at least have reached 32 million kilowatts.

The four nuclear units approved by the State Council will absorb a total investment of about 50 billion yuan. Of the four units, two are located in Sanmen in east China's Zhejiang Province, and the other two in Yangjiang of Guangdong Province, each with a generating capacity of 1 million kilowatts.

Simultaneously with the loosening in nuclear power construction, another notable change is that the change of nuclear power construction toward industrialization will make it possible to put forward its industrial development plan. However, the aforementioned four nuclear power plants have not yet been granted the "birth permission certificates".

Another 30 plants in the next 17 years

The 16th Party Congress set an economic development goal to quadruple the GDP, reaching US$4 trillion by 2020, on this basis the NDRC estimated that by then the whole nation will need around 800-850 million kilowatts of generating installed capacity (the figure given by electric power departments is 900-950 million kilowatts). The existing installed capacity is merely 350 million kilowatts, which means that 450-500 million kilowatts need to be added. However, calculated on the maximum installed capacity provided by the proven hydroelectric deposits plus thermal power fueled by natural gas and coal, there is still a gap of 32-40 million kilowatts. In order to fill the gap, the NDRC proposed a tentative plan under which the proportion of nuclear installed capacity will at least account for 4 percent of the total electricity installed capacity, an equivalent of 32-40 million kilowatts.

Since the combined installed capacity of the existing nuclear power plants plus those under construction only reaches 8.7 million kilowatts, 30 more plants will be built in the coming 17 years. That means China's nuclear power plant construction should make a dash henceforth. In the past 20-odd years from the 1970s to 2002 a handful of seven plants with a total installed capacity of 3.6 million kilowatts had been built and put into commercial operation.

Costs barrier

In commensurate with the "noble status" of nuclear energy, the current price of nuclear power is set high. The grid electricity price at Dayawan Nuclear Power Plant is 0.54 yuan, and the second phase of Qinshan Nuclear Power Plant 0.414 yuan, while that of thermal power in Zhejiang only 0.3-odd yuan.

The relatively high investment costs partly account for the high price of nuclear power. Currently the investment in thermal power is 4000 yuan per kilowatts, while that in nuclear power is 11,000- 16,500 yuan (or US$1330-2000), with a difference of 2.75-4.1 times between the two.

Another important reason is a relatively long nuclear power construction period of 70 months (about six years), or even 80-90 months if not properly controlled. In comparison, the construction period of thermal power plant generally lasts 30-odd months.

Because of the requirement for more investment and longer construction period, financial expenses on the construction of nuclear power plants is relatively high, and the price of its products is naturally high as well.

However, the service life of nuclear power facilities is about 30 years longer than that of thermal power. Furthermore, the competitiveness of its cost composition will be increasing with the passage of time. In terms of fixed-assets investment, the cost for nuclear power stands at around 50-60 percent, that for thermal power at 30-40 percent; as regards expense on fuel, it is 20 percent for nuclear power, while over 50 percent for thermal power; similarly, concerning operational expense, nuclear power makes up around 15 percent of the total cost, while thermal power represents a little over 10 percent. Since the cost of fuel for thermal power is proportionally large, relatively speaking, the cost for nuclear power will drop by a big margin after depreciation charge is deducted.

By PD Online Staff Zhu Lizhen

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