Chinaâ€™s decision to approve its first new nuclear reactors in two years may need to wait for its success starting up the worldâ€™s first next-generation units.
Plans to green-light eight reactors this year in the worldâ€™s fastest-growing nuclear market, announced last week, could depend on whether itâ€™s able to complete some of the worldâ€™s most-advanced facilities, including Westinghouse Electric Co.â€™s AP1000 and Areva SAâ€™s EPR. The first such reactors may come online as early as the first half, followed by new approvals, according to Karl Liu, an analyst at BOC International Holdings Ltd. in Hong Kong.
â€œThere are indications that Chinese policy makers want to wait for the AP1000s and EPRs under construction to come online and see how they do operationally before approving new projects,â€ said M.V. Ramana, a professor at the University of British Columbia. â€œI am not entirely sure that this plan will actually translate into reality.â€
China is seeking to be the first country to bring online either an AP1000 or EPR, so-called generation III+ reactors, which have suffered costly delays in the U.S. and Europe. The worldâ€™s second-biggest economy, and largest energy consumer, is aiming to boost its nuclear power capacity and develop its own next-generation technology for export.
Construction delays for third-generation units are among reasons the Chinese government approved no new reactors last year, according to BOCâ€™s Liu.
â€œThe country wants to wait until the first AP1000 reactor successfully starts commercial operations before approving reactors using the same or similar technologies,â€ he said.
The National Energy Administration sees at least five units finishing construction this year, including what may be the first commercially operating AP1000, used for the Sanmen No. 1 reactor in Zhejiang and EPR for the Taishan No. 1 reactor in Guangdong, which China General Nuclear Power Corp. began building in 2009.
Commercial operation of Taishan No. 1 is expected to begin in the second half of 2017, delayed from its original schedule start in the first half, Shenzhen-based CGN Power Co. said in a statement to the Hong Kong stock exchange on Monday. That timeline â€œwould be very challenging to achieveâ€ given how long tests and fuel loading may take, Morgan Stanley analyst Simon Lee said in a research note.
China in 2006 chose to build four AP1000 reactors, which is considered the basis for its own next-generation technology, according to the World Nuclear Association. Completion has been delayed due to design problems, supply chain bottlenecks and stricter safety measures after the 2011 Fukushima disaster in Japan. Four of the eight units the Chinese government aims to approve this year are planned to be AP1000s as well, according to the WNA.
Originally designed to be cheaper and safer than earlier technology, growing complexity and new safety requirements of third-generation reactors are among cost issues that contributed to Westinghouseâ€™s parent company Toshiba Corp. taking a multi-billion dollar writedown this year and Areva seeking a government bailout.
Chinaâ€™s power-generation overcapacity is another possible risk to new approvals, according to Ramana at the University of British Columbia. The country began showing signs of a glut as early as 2013, and hit a high in 2015, according to IHS Markit.