China's Energy Strategy
- From: PaPaPeng <PaPaPeng@xxxxxxxxx>
- Date: Sat, 04 Mar 2006 03:57:30 GMT
China embraces the atom
By Frederick W Stakelbeck Jr
http://www.atimes.com/atimes/China_Business/HC04Cb05.html
March 04, 2006
With domestic energy demand expected to increase steadily over the
next several decades and with a precipitous decline in domestic
production from existing oil and natural-gas fields, China finds
itself at an unavoidable "energy crossroads" that will define its
growth, influence and prosperity for years to come.
Recognizing the potential consequences associated with any protracted
energy shortage, Beijing has embraced nuclear power as a solution.
According to the China National Nuclear Corp (CNNC), the government
body responsible for much of the country's nuclear-power program,
China plans to invest US$48 billion to build 30 nuclear reactors by
2020. Currently, the country has nine reactors in operation with
another two under construction at a combined cost of $3.2 billion.
"Nuclear-power development is a must for China, especially in the
coastal areas," said Shen Wenquan, vice chairman of the Committee for
Science and Technology for CNNC.
The US Department of Energy's Energy Information Administration (EIA)
predicts China's annual nuclear-energy consumption could rise to 66
billion kilowatt-hours in 2010, up dramatically from 16 billion kWh in
2000. In addition, EIA predicts the country's nuclear electricity
consumption will rise to 129 billion kWh by 2015 and 142 billion kWh
by 2020, surpassing both Canada and Russia. Striking a balance between
energy demand and supply will be a key objective for Beijing's nuclear
program moving forward.
The country's 11th Five-Year Plan (2006-10) supports progress in the
areas of nuclear-power-plant development and construction. As a
result, more than 16 Chinese provinces, regions and municipalities
have already announced plans to participate in nuclear-power-plant
construction. CNNC president Kang Rixin recently noted that this
construction boom could increase the amount of nuclear power generated
from 2% of the country's total energy capacity to 6% by 2010, with as
many as 32 additional reactors built within the next 15 years.
Several factors have encouraged Beijing to pursue nuclear energy.
First, chronic electricity shortages of 35 million kW in 2004 and 25
million kW in 2005 forced Beijing to recognize the country's
deteriorating energy situation. Second, continuing difficulties with
the Chinese coal-mining industry, the country's main energy source,
have become inescapable. Coal produces 74% of China's energy; however,
the industry is beset by dangerous safety issues, with more than 6,000
killed in 2005 in mining-related accidents. In addition, the negative
environmental impact of greenhouse gases makes coal an increasingly
unattractive energy alternative.
Third, China's growing reliance on foreign oil and liquefied natural
gas (LNG) has placed the country in a precarious position. For China,
dependence on oil means dependence on the Middle East - a complex and
potentially explosive region that currently provides 60% of the
country's oil imports. Predictions by some industry experts that China
will import more oil than the United States within the next two
decades has raised fears in Beijing that oil could control the
country's destiny, making the identification and development of
alternative energy sources a key priority.
Fourth, the skyrocketing cost of building the country's oil and LNG
infrastructure has raised concerns in Beijing. Intricate
pipeline-construction agreements involving foreign countries; the
construction of a fleet of modern LNG carriers and updated and
expanded railroad systems; and the construction of large transport
terminals capable of handling huge quantities of oil and LNG continue
to place an enormous financial burden on the country.
Zhang Guobao, vice minister in charge of the National Reform and
Development Commission (NRDC), noted recently that China's tight power
squeeze could ease somewhat this year as new nuclear plants come
online. Beijing has also announced that it will continue its
prospecting efforts in the oil-and-gas-bearing basins in Bohai Bay,
Songliao, Tarim and Ordus, while coal exploration will continue in
Shaanxi, Shanxi, Shandong and Anhui provinces.
A key component of China's energy program is the development of
alternative nuclear power technologies. This year, a $370 million,
190-megawatt nuclear plant using "pebble-bed technology" is expected
to begin construction. Built by China Huaneng Group, parent of Huaneng
Power International Inc, the power plant will use new
high-temperature, gas-cooled reactor technology instead of the
pressurized-water technology.
Pebble-bed technology is intended to address the safety issues of
older reactor technologies; it is theoretically impossible for a
pebble-bed reactor to melt down, since even if all safety devices were
shut off and staff literally left the site, the reactor could not
achieve a high enough temperature to melt its own materials, and
therefore would simply cool slowly while remaining physically
undamaged.
Opponents of the new technology, such as Liu Wei, vice president of
the Beijing Institute of Nuclear Engineering, say it is
cost-prohibitive - $500 a kilowatt more than other commercially
available technologies. Other critics have noted that pebble-bed
technology can only be used in reactors of less than 300MW, making it
incompatible with a majority of China's new reactors, which are
1,000MW or more. However, pebble-bed advocates suggest multiple
reactor units at the same site as a way of circumventing this
shortcoming.
In another move designed to develop alternative energy technologies,
China has partnered with the United States, the European Union,
Russia, South Korea, India and Japan to experiment with nuclear
fusion. Fusion reactions, distinct from the fission reactions that
power all operational nuclear reactors today, produce energy by fusing
lighter atomic nuclei together into heavier ones at extremely high
temperatures and pressures.
"Fusion will be the final way out for the future," said Shen Wenquan
of CNNC. But fusion research has been conducted for decades at
enormous cost, and while technical progress has been made, no
practical prototype of an operational fusion reactor has been produced
so far.
To power its new generation of nuclear power plants, China will need
enormous amounts of uranium from a diverse pool of providers. The
country's known resources of 70,000 tonnes of uranium, from several
domestic uranium mines, is sufficient to meet only short-term needs.
The State Council announced last month that uranium prospecting will
be emphasized, including additional domestic exploration and mining.
Also last month, it was reported that Beijing would consider the joint
development of uranium mines with foreign countries as a possible
solution to its supply problems. Shen said, "If there's a possibility
of developing these resources through [a] joint venture, then we can
discuss that also."
Although China has agreements with Kazakhstan, Russia and Nambia,
further talks have commenced with Australia and Canada to fuel the
country's expected nuclear-reactor base.
China's push toward nuclear power has attracted the attention of the
international nuclear-power industry, with hundreds of well-known
companies such as US-based, UK-owned Westinghouse, France's Areva and
Russia's AtomStroyExport battling for a chance to participate in
reactor construction and design.
For its part, the US has voiced its support of China's efforts to
develop a clean and safe nuclear-power industry. "The US wants to be
part of such a rapidly growing nuclear-power-plant program," said one
US diplomat.
The US Nuclear Regulatory Commission has already given its approval
for the export of nuclear equipment and engineering services, as well
as fuel and generating units to China. The US Commerce Department and
the US Embassy in Beijing have approached the Chinese government to
promote a pending bid by Westinghouse for the construction of four
1,000MW nuclear power facilities. Last month, the Export and Import
Bank of the United States approved $5 billion in loans to support the
bid.
Although Beijing's efforts to address its emerging energy needs have
received a positive response from many observers, several questions
remain unanswered concerning the nuclear program. Under even the most
optimistic projections, a 2-4% increase in the country's overall power
capacity over a 15-year period as a result of nuclear-power-plant
construction will not be nearly enough to cover expected increases in
residential and commercial energy demand.
In addition, some members of the scientific community have questioned
the benefits associated with nuclear power, when the risks of
catastrophic failures, waste disposal and terrorism are considered.
"We don't have a good plan for dealing with spent fuel, and we don't
have a very good emergency plan for dealing with [a] catastrophe,"
admitted Wang Yi, a nuclear-energy expert at the Chinese Academy of
Sciences in Beijing.
With energy-consumption levels expected to reach those of the US by
2025 and dependence on foreign energy sources accelerating by the day,
Beijing is in need of a long-term remedy to its energy ills - nuclear
power may or may not provide such a remedy. Whatever the answer to
China's energy needs, it should be pursued with caution, keeping in
mind the delicate balance between the country's future energy needs
and the possible human and environmental costs associated with
achieving energy autonomy.
Frederick W Stakelbeck Jr is an expert on bilateral and trilateral
alliances as they relate to China foreign policy. His writings address
the implications of China's emerging regional and global strategic
influence and relationships upon US national security. Comments can be
forwarded to frederick.stakelbeck@xxxxxxxxxxx
.
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