China to Suspend Approval of New Nuclear Projects

 Published: 3/16/2011 8:36:04 PM GMT
WSJ Original Cached

SHANGHAI—China halted approvals of new nuclear power plants pending changes to safety standards, signaling a shift toward caution from a country embarked at high speed on the world's biggest expansion program but where public nervousness is growing as a disaster unfolds in neighboring Japan.

The government also ordered integrity checks at existing plants. The country has 13 nuclear reactors in operation, at least 25 more under construction, and a five-year plan adopted by the National People's Congress just this month contains approvals for dozens more units. In the more distant proposal stage, more than 70 additional reactors are on the drawing boards, including for regions with known seismic activity, according to a World Nuclear Association tally.

Premier Wen Jiabao's cabinet, the State Council, "has suspended the approval process for nuclear-power stations so that safety standards can be revised after the explosion at a Japanese plant," the state-run Xinhua news agency reported on Wednesday.

"Safety is our top priority in developing nuclear power plants," the State Council said.

Details are vague about how China will conduct its safety review. Analysts said the message stops well short of a halt in the program, even as they warn that the pace of China's nuclear construction program threatens to outstrip its ability to regulate the industry.

Despite radiation leaks and plant failure in northeastern Japan following last week's earthquake and tsunami, analysts said it is difficult to see how China can achieve its clean-air goals without significant investment in nuclear power.

Analysts said China's program, like those planned in the U.S. and other countries, reflects how the political pendulum had swung in favor of nuclear, not that policymakers considered it risk-free. "Before the Japanese accident happened, there was already an internal debate in China about how fast the program should go," says Mark Hibbs, a senior associate in Carnegie Endowment for Peace's Nuclear Policy Program.

Most immediately, the State Council message may be aimed at addressing public anxiety about the events in Japan as part of a public-relations exercise. "The politicians can't be indifferent," said Manouchehr Takin, an analyst at London's Centre for Global Energy Studies.

Concern is building in eastern Chinese cities that deadly levels of radiation from Japan's Daiichi Fukushima plant may drift toward China, even though officials insists there is no immediate danger. Some Shanghai residents, distrustful of the official line, have been swapping ideas about the best protective clothing and foods to reduce radiation risks. Internet and telephone companies have censored some messages warning about perceived risks.

In a new daily reporting system, the Chinese National Nuclear Safety Administration is sending monitors onto the East China Sea with radiation-detection equipment. "Nothing unusual has been discovered," the administration reported. Chinese port inspectors have been ordered to check Japanese imported goods for contamination.

The State Council's statement marked a change in approach after steadfast comments from lower-level officials and in the country's nuclear industry that Japan's problems would never deter China from pursuing its nuclear objectives. Some of those officials cited China's plans for superior technology as a reason to be confident in the program. The message from Mr. Wen's cabinet clarified that China's leadership sees room for improvement.

While China does plan next generation designs for its future plants, an increasing portion of the production will be based on technology transferred to China, unlike in past years when equipment was largely imported from the U.S., France and Japan. The industry is also pursuing the tricky and potentially dangerous goal of reprocessing spent uranium, among other technological leaps.

The National Nuclear Safety Administration and other government agencies now face the challenge of hiring, training and retaining enough experts to police a system expanding quickly into multiple sites in distant parts of the country—at a pace one step ahead of the industry.

"There's not enough safety experts to do all that," said Mr. Hibbs. He said Japan's ability to end its emergency will ultimately turn on logistics, expertise and other programs that were years in the development.

Billions of dollars are at stake for foreign companies in the Chinese program, and its timetable.

A number of major suppliers to China's industry declined to comment on Wednesday's statement. Among them is Toshiba Corp.'s Westinghouse Electric, which produces a reactor called the AP1000 that features a passive safety system that doesn't require the same kind of pumps that failed in Japan.

Westinghouse is 20% owned by Louisiana-based Shaw Group Inc. Shaw's chairman, president and chief executive officer, J.M. Bernhard Jr., said in a recent statement that he expected "construction timelines will continue as planned" for plants in the U.S. and China despite the crisis building in Japan.

China, along with India, has an ambitious program to develop civil nuclear power in a bid to realize its target of having 15% of its energy mix come from nonfossil fuels by 2020 in an effort to reduce pollution.

The National Development and Reform Commission, the country's top economic planner, said earlier this month it aims to develop 40 gigawatts of nuclear power over the next five years, almost four times the 10.8 gigawatts currently operational.

China will conduct an overall safety check into its nuclear facilities, and inspect nuclear plants being built to ensure they conform to safety standards, the State Council said after a meeting held by Premier Wen Jiabao. It didn't say when the new rules would be approved.

It added that Chinese government experts believe radioactive material from Japan's Fukushima Daiichi nuclear power plant, which was damaged during Friday's devastating earthquake and ensuing tsunami, won't harm public health in China.

There are 443 nuclear reactors in operation world-wide and 58 under construction, according to the World Nuclear Association, an industry group. China alone aims to add a further 160, while India has plans to build 58, and a total of 482 new plants are being proposed and planned world-wide.

China signed a final agreement with Westinghouse Electric in July 2007 to buy third-generation AP1000 reactors that included the transfer of AP1000 technology to China.

China more than tripled its uranium imports last year to feed new nuclear reactors and to raise stocks of the fuel for its nuclear-expansion program over the decade.

The country's main nuclear power developers China National Nuclear Corp. and China Guangdong Nuclear Power Holding Co. struck a string of deals in recent years with overseas miners to ensure long-term uranium supplies. As recent as earlier this month, China Guangdong Nuclear offered to take over Kalahari Minerals PLC in a £756 million ($1.22 billion) deal.

Write to James T. Areddy at [email protected] and Brian Spegele at [email protected]

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