Chinese nuclear industry must keep public support for expansion

Regulators and operators rattled by industrial project protests

China’s nuclear industry has in recent years ventured overseas for new opportunities but it is now facing challenges at home gaining public acceptance of its $150bn expansion plans.

Fears of a nuclear power backlash, stoked by recent demonstrations against other large industrial projects, have rattled regulators as well as nuclear operators China National Nuclear Corp (CNNC) andhink China General Nuclear Power Corp (CGN).

Nuclear power is central to Beijing’s efforts to reduce unpopular smog while keeping the manufacturing economy humming in its populous eastern cities. China plans to expand its nuclear generating capacity to 58GW by 2020, with another 30GW under construction by that time.

CNNC and CGN are at the forefront of this unparalleled nuclear ramp-up. They operate all of China’s 20 nuclear reactors and are neck and neck in building new ones – between them they account for 25 of the 28 currently under construction.

Both are trying to develop their own reactor designs as platforms to expand internationally, and both are dependent on continued acceptance by the Chinese public, as well as on the successful construction of models untested anywhere else.

Last year, China’s only nuclear-related protest to date resulted in the abrupt cancellation of a $6bn uranium processing plant the two groups had proposed for Guangdong Province.

Regulators fear images of riot police crushing protests at a reactor site – like this month’s violent clashes over a planned garbage incinerator – could quickly harden attitudes against nuclear power.

“If the government just keeps the same attitude of secrecy as in the past, it will create more problems. They need to pursue nuclear power appropriately and safely, otherwise there will be more conflicts between the government and people,” says Cao Heping, who studies green economy at Peking University.

The concerns have even moved Chinese regulators to request help from the UK in the hope its government can offer tips on developing public and media support for nuclear power.

The British for their part want to promote transparent reporting in China, which will soon host the world’s second-largest nuclear power generating capacity after the US.

The UK government request comes as the two operators plan to take between a 30-40 per cent stake in Hinkley Point C, Britain’s first new nuclear reactor in 25 years, pending an EU review of the terms France’s EDF has agreed with Whitehall.

Despite nuclear power remaining under the radar for most Chinese – its civil nuclear power industry has not experienced a serious leak or incident since commercial generation began in the 1990s – many more people will soon find themselves in proximity to a nuclear plant.

The rollout is also forcing CNNC and CGN to consider listing part of their assets this year – CNNC in Shanghai, CGN in Hong Kong – as the financing demands of the domestic expansion strain their previous reliance on low-interest loans from state-owned banks.

Reactors at three new sites started up in the past year and a further nine are being built along its coastline, with developers pushing for approval for even more inland sites.

In April, premier Li Keqiang urged development of coastal nuclear power plants “when appropriate”. Beijing subsequently gave the green light to three more projects.

Industry executives say Mr Li’s “when appropriate” caveat followed internal discussions about the need to tread carefully, to avoid arousing any anti-nuclear sentiment.

Meanwhile, the meltdown at Fukushima in Japan strengthened Chinese regulators’ hand, but also raised worries about public acceptability.

After the Fukushima meltdown, regulators shelved almost half of the 100 or so planned reactor projects due to design or site concerns, including those in earthquake zones or on inland rivers with limited water supply.

That review plus signs of slippage in construction means China could struggle to have all of the new reactors operational in the next six years.

Earlier this year, senior energy official Zhang Guobao lambasted CNNC for two-year delays on the Fuqing reactors in Fujian province, which were supposed to showcase CNNC’s indigenous reactor design.

British engineering group Invensys – recently acquired by Schneider Electric – is supplying the control systems for eight CNNC reactors in China. In 2012 Invensys took a £40m charge for delays and additional engineering costs related to Fuqing, the first to be built.

“We have the right people and processes in place to resolve the issues we and our customer collectively encountered, and we are making good progress,” Schneider Electric says.

At Daya Bay, China’s second-longest operating reactor, CGN began a concerted programme of outreach including tours of its visitors’ centre.

CGN is constructing the prototype European pressurised reactor – which is the design EDF proposes for Hinkley Point C – in Taishan in Guangdong Province, with the French group as minority investor. Despite delays due to the post-Fukushima safety review and construction hitches, the plant is likely to be one of the first EPRs to begin commercial operation.

Employees say local managers were blindsided by a flurry of critical articles in the Hong Kong press last year.

China’s protracted crackdown on civil dissent deters local activists from taking the lead publicly on sensitive projects. Opposition can thus quickly turn into street protests despite new government initiatives to allow public feedback and that could prove a problem if public opinion sours on nuclear power.

Local governments often welcome the investment and jobs nuclear projects bring but disagreement among local officials can fuel protests. City officials’ unease over oil company Sinopec’s long-delayed paraxylene plant was a factor behind demonstrations in Maoming, a southern petrochemical base.

Sinopec has responded by offering “public days” at the Maoming complex.

The nuclear industry is studying the same tactic. One lawyer who posted questioning the safety of nuclear power was surprised at a flurry of technically detailed responses. “It’s as if they are preparing the case to counter any opposition,” she says.

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