China's Climate Ambitions are Contingent on a USD 440 Billion Nuclear Expansion
Nuclear power used to be thought of as the world's most excellent chance for a carbon-free future. Following decades of cost overruns, public outcry, and tragedies abroad, China has emerged as the world's last big believer, with promises to create a staggering quantity of nuclear energy swiftly and at a cheap cost. China has unveiled the breadth of its nuclear ambitions over the year, an ambition that has gained renewed resonance considering the global energy crisis and calls for action from the COP26 Climate Summit in Glasgow. China, the world's largest emitter, plans to build at least 150 nuclear reactors in the next 15 years, far more than the rest of the world has done in the previous 35. The project might cost up to USD 440 billion, and by the middle of this decade, the country will have surpassed the United States as the world's most significant nuclear power generator.
Distinctively, nuclear power has lost favour in the United States, France, and Japan. As part of President Xi Jinping's ambition to make China's economy carbon-neutral by mid-century, the government has never been shy about its interest in nuclear power, and renewable energy sources. However, in its formal five-year plan earlier this year, the government singled out atomic power as the sole energy source with specified intermediate objectives. Soon after, the head of China General Nuclear Power Corp., a state-owned company, stated the longer-term goal: 200 gigawatts by 2035, enough to power more than a dozen cities the size of Beijing.
Given their fiscal restrictions, political will, and public opinion, it would be the type of massive energy transition that Western democracies can only dream of. It might also help China achieve its objective of exporting technology to the developing world and beyond, which has been aided by an energy shortage that has exposed the vulnerability of alternative power sources. Slower winds and poor rainfall have resulted in lower-than-expected supplies from Europe's dams and wind farms, exacerbating the issue. High-cost coal and natural gas have forced China and India to impose power restrictions. Nuclear power plants, on the other hand, have stayed steadfast.
China claims its measures would avoid around 1.5 billion tonnes of carbon emissions each year, more than the United Kingdom, Spain, France, and Germany combined. It's a hugely intriguing experiment at a size equal to the challenge for those who consider nuclear power as crucial to weaning off planet-warming fuels like coal.
Even if China develops the world's most cost-effective, safe, and adaptable nuclear reactors, the United States, India, and Europe are unlikely to welcome China into their electricity grids. Since 2019, GCN has been on a United States government blacklist for allegedly stealing military technology. The United Kingdom began exploring methods to remove GCN from the Sizewell reactor project in July. By 2060, China hopes to have replaced virtually all its 2,990 coal-fired power plants with sustainable energy. Wind and solar will become crucial in the nation's energy mix to make this a reality. According to a report published last year by academics at Tsinghua University, nuclear power, which is more expensive and more dependable, would be a close third.
There are 46 reactors in China that are either planned or under construction as compared to two in the United States. Other countries would have to scrimp and save to match China's investment. As per Francois Morin, China director at the World Nuclear Association, roughly 70 percent of the cost of Chinese reactors is paid by loans from state-backed banks, at rates significantly lower than those available to other countries.
Because most of the expense of atomic energy is in the initial building, this makes a significant difference. Nuclear power costs roughly USD 42 per megawatt-hour at 1.4 percent interest, which is about the minimum for infrastructure projects in China and Russia and is significantly cheaper than coal and natural gas in many regions. Nuclear power costs USD 97 per kilowatt-hour at a 10 percent rate, making it more expensive than all other forms of energy in modern nations. China maintains the exact prices a secret, but it is believed that China can build reactors for USD 2,500 to USD 3,000 per kilowatt, approximately a third of the cost of previous projects in the United States and France.
The cost of adding 147 gigawatts by 2035 is estimated to be between USD 370 billion and USD 440 billion, which might be a bonanza for GCN Power Co., China National Nuclear Power Co., and China Nuclear Engineering & Construction Corp. investors. Currently, shares in listed units of all three state-owned enterprises have increased by 19 percent to 43 percent since August, compared to a 2.3 percent dip in Hong Kong's Hang Seng Index.
China also anticipates that its domestic initiatives will entice prospective international purchasers. Through its Belt and Road Initiative, China might build 30 abroad reactors worth USD 145 billion by 2030, according to the former head of China National Nuclear Corp. Like China, Pakistan shares a sometimes fiercely disputed border with India has been its most enthusiastic buyer. Since 1993, China has built five nuclear reactors, one of which went online this year, and another slated to be finished next year.
Other countries, on the other hand, have been more cautious. Romania abandoned an agreement with GCN for two reactors last year and instead collaborated with the United States. Argentina's 2015 accord has been postponed due to economic turmoil and changes in the country's administration. Memorandums of understanding for the construction of reactors have failed to materialise with nations such as Kenya and Egypt.
Potential partners are concerned about more than just the geopolitical implications. China has not ratified any of the international conventions governing the sharing of guilt in the case of an accident. It has also declined to accept wasted gasoline, putting it at a disadvantage when competing with Russia.
Even yet, in Karachi and Fujian province, replicas of China's first domestic reactor design, known as Hualong One, continue to function safely. In September, China announced the successful test of a new modular reactor that may be attractive to foreign investors. China Huaneng Group Co. said that it had accomplished continuous nuclear reactions in a 200-megawatt reactor created in-house that heats helium rather than water. It should prevent the significant meltdown that forced the evacuation of more than 150,000 people in Fukushima by making the cooling mechanism independent of external power sources.
If effective, China's modular reactors would eliminate the need for new power plants. Morin of the World Nuclear Association stated that they could theoretically replace coal-fired generators in current thermal power facilities. Before the Fukushima accident, China's nuclear ambitions were considerably loftier. The Chinese government slapped a freeze on new projects and initiated a thorough safety evaluation of its whole programme within a week after the tsunami that caused a Japanese nuclear power plant meltdown. It decided in 2014 not to construct any new reactors that required active safety measures, such as the one at Fukushima. It held approvals for several years until it was happy with its new technology.
Three-Mile Island, Fukushima, and Chernobyl: Each incident highlights the most evident danger associated with nuclear power. Plants contain extremely harmful radioactive material; spent fuel may discharge twenty times the deadly radiation dosage in one hour, even after ten years of cooling. And the potential for immediate and long-term devastation in the case of a leak or explosion is considerable. After an explosion released radioactive material into the atmosphere in Chernobyl, 350,000 people were forced to evacuate, and scores of employees perished from radiation exposure within weeks. There are still allegations of dangerously high amounts of radiation in locally produced milk and grain more than 30 years later.
According to scientists, technology has improved, and the long-term impacts of the Fukushima meltdown have been less catastrophic than many had predicted. However, public support for nuclear power has eroded that new investment in most democracies is politically unviable. At COP26, the International Atomic Energy Agency and industry representatives were denied permission to set up business in a more prominent and conspicuous location. Legal challenges and popular resistance have stymied japan's efforts to restart its fleet. Next year, Germany will close the last of its reactors, and France will reduce its nuclear energy dependency from 70 percent to 50 percent by 2035.
Beijing's track record had primarily been immaculate until June when allegations of a problem at a French-designed factory in Taishan surfaced. Any news of an issue at a nuclear power station is concerning, let alone one so close to Hong Kong and Shenzhen. The event highlighted a possible issue with large nuclear projects and how Chinese enterprises' characteristic lack of openness and public accountability might exacerbate the problem. Despite media reports and suspicions that the facility was having problems, GCN asserted that everything was great. Their partner, the French utility EDF, wasn't so convinced and finally went public with its case to get additional information, even notifying the US government at one point.
It took weeks for Chinese officials to clarify that the issue was caused by a few broken fuel rods, which is a regular occurrence, and, in this case, experts agreed, not life-threatening. The facility was finally shut down for repair, which EDF claimed was standard procedure in France. While the incident was primarily unremarkable, it did exacerbate the already widening trust gap between China and the global nuclear technology industry. China's economic practices are frequently opaque and antagonistic to other major emitters. Even if Chinese technology proves to be safe and cost-effective, the United States, India, and others are unlikely to develop vital infrastructure around it.
China's GCN invested in three reactor projects in the United Kingdom in 2016 as part of an effort to modernise the country's ageing nuclear fleet. Even as the country faces a potentially severe energy crisis this winter, government officials attempt to reduce GCN's role in one of the projects while purchasing its interest in the other two.