New Build

By Paul French, Asia Correspondent

Replicating the CAP1400 reactor opportunity to export markets seems like a pipedream today, but that’s how technology always starts out. This dream, if ever acted upon, could also take China into markets it has not traditionally targeted.

Recently Tim Stone, the expert chair of the nuclear development office under the UK's Department of Energy & Climate Change and chairman of KPMG's Global Infrastructure & Projects Group, told Chinese journalists that the Chinese nuclear industry was developing rapidly and that the experience it was gaining was providing Chinese companies with opportunities to invest in developed nuclear markets such as the United Kingdom.

The AP1000: a cookie cutter model to build export opportunities?

In 2008 and 2009 Westinghouse made agreements to work with China’s State Nuclear Power Technology Corporation (SNPTC) and other nuclear institutes in the PRC to develop a larger version of the AP1000 reactor, starting with a 1400MWe capacity unit to possibly be followed by a 1700MWe design.

China owns the intellectual property rights (IPR) for these larger designs, which they have called CAP1400. As the project has reached this stage it seems that exporting the new larger units may be possible with Westinghouse's cooperation.

Speaking about the UK in particular Tim Stone notes that: “These are the reactors (AP1000s) that either are already being used in the UK or could well be once our nuclear companies have chosen the technology they will use. Those Chinese component manufacturers could supply their components in the UK.”

Equally so for Areva reactors. "The easy way (for China) to get into the UK is through their partnership with Westinghouse or Areva," suggests Stone.

Components for export

The so-called Chinese CRP-1000s are the most numerous reactor types under construction in China, a Chinese development of the French 900 MWe three cooling loop design imported in the 1990s. Though most of the components are now built in China, the IPR remains with Areva. This can potentially limit the overseas sales potential of the CPR-1000 reactor, but not necessarily the associated components for Areva reactors.

Daniel Money, a project manager with the Shanghai-based Nicobar Group, a consultancy advising foreign nuclear companies on how to best target the Chinese market, believes that Tim Stone is only stating the obvious when he says the UK will eventually purchase Chinese-made rector components.

Is UK lacking a domestic components supply chain?

Money notes the UK has little domestic capability to produce the components the country’s nuclear programme requires and has really no domestic supply chain. More importantly, Money believes, by the time the UK is looking to source components, China will be among the most advanced nuclear nations with the launch of its own 3G reactors, the Chinese ACP600 3G reactor scheduled for completion in 2013.

Money thinks that at this point European countries, including the UK and France, as well as nuclear aspirant nations globally, including South Korea, will start to purchase Chinese components. The laggard is expected to be the USA.

Unwelcome news for USA

The Alliance for American Manufacturing ‘s(AAM) Senior Analyst Kerri Toloczko has admitted that while it is likely that China will  start attempting to export components to America and other developed nuclear markets, probably at a lower cost, “any agreements between American companies and China that would import Chinese products for America's new nuclear plants could be unwelcome news.”

Toloczko argues that this is not just a trade protectionism argument to safeguard American jobs, but one of quality and safety. When it was vaguely suggested that Chinese components could be potentially used as part of two new reactor projects in Burke, Georgia, the AAM’s executive director Scott Paul was quick to denounce the idea and called upon the US Nuclear Regulatory Commission to stop the process.

While at present this opposition exists, Daniel Money in Shanghai believes that eventually America will also start to buy Chinese components. Like the Europeans and others, these will most probably be, what Money terms, “construction” items – pipes, valves, tubes etc, most of which will not be critical components from a safety perspective.

However, all this, often rather partisan and heated, talk rather there’s no particular reason to be concerned about Chinese components from a safety perspective – China’s safety record is so far fine and there are no reported problems with any exported components to date.

Pipedream or eventuality?

China is likely to have a keen strategy to export components. Since the mid-1990s China’s nuclear industry has sought to include components manufacturing and sales into nuclear co-operation agreements. For instance, Beijing’s co-operation agreement with Seoul, South Korea (signed in 1995) includes an, “…agreement for cooperation in establishing manufacturing facilities in China for nuclear components and equipment, and on the fabrication of sets of major components for 30-40 reactors.”

Similar agreements exist with a number of other developing or regional Asian countries as negotiated by the PRC’s National Nuclear Safety Administration (NNSA) and Foreign Ministry. So, perhaps a pipedream is not the best way to describe China’s future nuclear components export market, but rather an eventuality.