China pow­ers up on nu­clear projects

CNG is be­com­ing a ma­jor player on the global stage af­ter ex­pand­ing its civil ura­nium sup­ply chain to meet in­creased do­mes­tic de­mand

China Daily (Hong Kong) - - BUSINESS - By ZHENG XIN in As­tana, Kaza­khstan zhengxin@chi­nadaily.com.cn

China’s largest nu­clear power group is ex­pand­ing its ura­nium sup­ply chain for do­mes­tic and world­wide civil projects.

The State-owned China Gen­eral Nu­clear Power Corp has put to­gether agree­ments in most of the ura­nium-pro­duc­ing coun­tries, in­clud­ing Namibia, Kaza­khstan, Aus­tralia and Canada.

This has been part of the com­pany’s de­vel­op­ment in the past 11 years, Yu Zhip­ing, gen­eral man­ager of CGNPC Ura­nium Re­sources Co Ltd, a sub­sidiary of CGN, stressed.

“It is ex­tremely im­por­tant for Chi­nese nu­clear power op­er­a­tors to se­cure ura­nium re­sources over­seas for longterm sup­ply se­cu­rity,” said Joseph Ja­co­belli, a se­nior an­a­lyst of Asian util­i­ties and in­fra­struc­ture at Bloomberg In­tel­li­gence in Hong Kong.

CGN is one of only two com­pa­nies in the coun­try per­mit­ted to im­port nu­clear fuel, along with China Na­tional Nu­clear Corp. It op­er­ates in 20 coun­tries from its head­quar­ters in Shen­zhen, with to­tal as­sets worth 430.7 bil­lion yuan ($64 bil­lion).

The group, founded in the 1990s, ex­panded its links with Kazatom­prom af­ter ink­ing a 10-year deal with the Kaza­khstan State-owned com­pany in 2010.

Back in May, CGN an­nounced that it would in­crease its nu­clear fuel sup­ply, in­clud­ing ura­nium min­ing, nu­clear fuel pel­lets and nu­clear fuel fab­ri­ca­tion, to cater for ris­ing de­mand for its civil power plant projects.

Yu also con­firmed that the nu­clear fuel fab­ri­ca­tion plant in Kaza­khstan, a joint ven­ture be­tween Kazatom­prom and CGN, is ex­pected to be op­er­a­tional by 2019.

“The fuel will be sup­plied mostly to CGN projects at home and abroad,” Yu said. “The fuel will also be sup­plied to Kaza­khstan’s planned nu­clear plant.”

Be­sides its close busi­ness ties in Kaza­khstan, CGN owns and op­er­ates the Namib­ian Husab Ura­nium Mine, which can pro­duce 5,500 met­ric tons of nu­clear fuel per year. It is the third largest ura­nium mine in the world.

Last year, the com­pany also paid $63.78 mil­lion for 19.99 per­cent stake in Fis­sion Ura­nium Corp in Canada. It was the first di­rect in­vest­ment by a Chi­nese group in the Cana­dian ura­nium sec­tor.

Along with Aus­tralia, Kaza­khstan and Canada ac­count for 63 per­cent of the world’s ura­nium re­sources, fig­ures re­leased by the In­ter­na­tional Atomic En­ergy Agency showed.

In­dus­try in­sid­ers be­lieve Chi­nese cor­po­ra­tions have the po­ten­tial to be­come ma­jor global play­ers when they come to civil nu­clear tech­nol­ogy af­ter beef­ing up their sup­ply chains.

“Strate­gi­cally, it is im­por­tant for any coun­try with am­bi­tious nu­clear power gen­er­a­tion ex­pan­sion plans to se­cure fuel re­sources,” Ja­co­belli, at Bloomberg In­tel­li­gence, said.

“Given China’s long term ex­pan­sion plans for nu­clear power, it is highly un­likely that the coun­try will be self-suf­fi­cient,” he added.

Still, there are few coun­tries ex­pand­ing their civil nu­clear power sec­tor, so ura­nium sup­plies should not be prob­lem, Ja­co­belli pointed out.

Although the price of ura­nium is ex­pected to climb in the long term, CGN is con­sid­er­ing ac­quir­ing more as­sets to cope with de­mand.

The rise of civil nu­clear power gen­er­a­tion in China has been stag­ger­ing with ca­pac­ity dou­bling be­tween 2010 and 2014 to about 20 gi­gawatts.

It is now al­most cer­tain to triple by 2020 to 58 GW an­nu­ally, or the equiv­a­lent of pro­vid­ing elec­tric­ity for at least 135 mil­lion house­holds, Bloomberg In­tel­li­gence es­ti­mated.

And mas­sive growth should con­tinue into the next decade.

“Rel­a­tive to con­struct­ing wind or so­lar fa­cil­i­ties, the build­ing of civil nu­clear power plants is more com­plex as se­cu­rity is the num­ber one pri­or­ity,” Ja­co­belli said.

“Nu­clear power projects take about five years in the con­struc­tion phase and that does not in­clude plan­ning and ap­proval,” he added. “A wind or so­lar fa­cil­ity of medium size takes less than a year.”

But nu­clear en­ergy plays an “ir­re­place­able role in China’s en­ergy se­cu­rity”, CGN Chair­man He Yu pointed out. It also helps to re­duce air pol­lu­tion caused by coal-fired power gen­er­a­tion.

He has called for the mass pro­duc­tion of the coun­try’s home­grown third gen­er­a­tion Hua­long One re­ac­tor, suggest­ing that up to six civil nu­clear plants should be built an­nu­ally in the run up to 2020.

This would in­crease nu­clear power ca­pac­ity in China to at least 150 GW by 2030.

It is im­por­tant for any coun­try with am­bi­tious nu­clear power gen­er­a­tion ex­pan­sion plans to se­cure fuel re­sources.” Joseph Ja­co­belli, ex­pected to­tal an­nual nu­clear power gen­er­a­tion ca­pac­ity in China by 2020

LUKE MAC­GRE­GOR / BLOOMBERG

A worker walks through the con­crete batch­ing area dur­ing the early part of pre-con­struc­tion at the planned Hink­ley Point C nu­clear power sta­tion in the United King­dom.

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