Only viable option for future

Updated: 2012-07-16 13:32

By Dan Luo & Wenjun Shi (China Daily)

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To meet China's soaring energy needs, ambitious plans have been drawn up to support the expansion of nuclear power generation

This month the first of Japan's 50 nuclear reactors came back online more than a year after the Fukushima Daiichi disaster in Japan. Before the reopening of the reactor at the Ohi plant in western Japan, the country had been without any nuclear-generated electricity for the first time since 1970.

As a result the country's reliance on fossil fuel imports soared. Oil and gas imports more than doubled on the previous year, contributing directly to the country's record trade deficit of $32 billion.

The trauma of Fukushima also led to a major rethink over the use of nuclear power in Europe. Germany, Italy, Belgium and Switzerland have all scaled back their nuclear power programs. Even France, where more than 75 percent of the country's electricity is generated by nuclear power, has announced it will reduce its dependency on nuclear power.

However, many countries, in particular emerging economies with soaring energy demands, are looking to expand their nuclear power programs.

In China, the National Energy Administration made it clear late last year that nuclear energy would be the foundation of the country's power generation over the next 10 to 20 years and 12 reactors are currently under construction.

China has long depended on coal as its primary energy source. However, the use of coal takes a heavy toll on the environment. And although the proven coal reserves in China are rich - it boasts 13 percent of the world's total coal reserves and meets half of the world's coal demand every year - the country consumes so much coal that it became a net importer in 2007. Of the other two fossil fuels, natural gas and oil, the proven reserves of natural gas in China are just 1.3 percent of the world's total and the proven reserves of oil are just 1.2 percent.

In 2010, China imported more than half of the oil it consumed. Despite having diversified its oil supply toward more secure sources, such as Brazil, Russia and Australia, such a high dependency on external supply has inevitably exposed the country to serious energy security problems.

To address these problems the government has set a target of increasing the share of non-fossil fuel energy to 15 percent of its total energy consumption by 2020 and 30 percent by 2050.

However, renewables such as hydropower and wind power are unlikely to be the answer. Large hydropower projects have been highly controversial, with opponents arguing that they damage biodiversity, affect water quality and destroy cultural heritage. And due to the intermittent nature of wind power, grid companies are reluctant to make the additional investments necessary to link up more wind power sources to the electricity supply network. Only 60 percent of wind power capacity is connected to the national grid. Add to this the fact that the cost of renewable energy is significantly higher than the cost of coal, and it is clear that China has got a long way to go to make the wider use of non-fossil energy commercially viable.

So at present the only real option is nuclear power.

Although nuclear energy comprises only about 2 percent of China's electricity supply at present, the country has built an extensive infrastructure network and developed key technical capabilities that are ripe for large-scale expansion.

The initially slow development of nuclear energy in China was not down to lack of money or technology. Instead, it was due to the misguided belief that the country could rely on its abundant coal reserves and so had no need to invest in expensive alternatives. But the country now realizes the strategic importance of nuclear energy. Ambitious plans have been drawn up to support the expansion of nuclear power generation.

China has set a medium-term target of achieving 40 gigawatts of nuclear power generation capacity by 2020. It has yet to decide whether it should aim for 120 gW, 240 gW or 360 gW - 30 percent of its total energy generation - by 2050.

In China's case the development of nuclear power has several advantages.

First, nuclear fuel is a highly concentrated energy resource that can be stored or transported easily. Uranium resources are also thought to be more evenly distributed geographically, which effectively reduces the risk of supply disruption.

Despite limited reserves of uranium in China, it is regarded as a quasi-domestic resource and can easily be bought on the international market relatively cheaply. Therefore, China could start to build up its strategic reserves.

Second, the generating costs of nuclear plants are much lower than those of coal-fired or liquefied natural gas plants. Fuel costs account for about 40-60 percent of the total cost for the latter two types of plant, whereas this figure is only 5 percent for nuclear power plants.

Although the construction of nuclear power reactors may incur high initial costs, nuclear energy is more cost effective in the long run, particularly when the cost of fossil fuels is constantly rising due to severe supply shortages and increasing demand.

Moreover, surveys show most people believe clean energy has the potential to play a key role in the country's future energy mix.

Local governments are also keen to cooperate with nuclear investment corporations, as they believe nuclear plants may help local economies grow by lessening electricity shortfalls, increasing local tax revenues and creating employment.

Last but not least, nuclear power plants can operate under extreme weather conditions and can be built throughout the country. This is particularly important for China as it may help it resolve serious issues of energy shortage in its coastal regions.

Despite all these advantages, the development of nuclear power in China faces tough challenges, not least the treatment of nuclear waste.

Nevertheless, it will help China meet its soaring energy demands while lessening the environmental damage caused by fossil fuel energy generation.

Dan Luo is lecturer in business and finance at the School of Contemporary Chinese Studies, University of Nottingham, and Wenjun Shi is a chemical engineer in the energy department of the engineering and design consultancy Atkins Global.