March 17,2011

China Suspends Approvals for Nuclear Power Projects

By CSC staff,Shanghai

China's State Council led by Premier Wen announced to temporarily suspend approvals for nuclear power projects until a new safety regulation is issued. It also said to adjust its long-term development plan of nuclear power. The government urged for comprehensive checks over existing nuclear plants.

China has an ambitious plan. The government in its 12th Five-year plan ambitiously targets to raise non-fossil energy's share in total energy consumption by 3.1ppt to 11.4% and to lower carbon dioxide emission per unit of GDP by 17ppt. Despite the rapid growth in other alternative energies, reaching these FYP goals hinges on nuclear power, which has only 10.8Gw capacity (1.1% of China's total power generation capacity). So far the official plan is to increase nuclear power capacity to 39Gw by 2015 and 86Gw by 2020. Nuclear power capacity could be planned to reach 100Gw by 2020. Suspending approvals of new nuclear power projects won't affect the plan of 39GW by 2015 because about 28 nuclear power plans have been planned with a total capacity of 30Gw (plus the existing 10.8GW, China could have 40.8Gw by 2015). It will be very true that the Chinese government will be much more cautious about the safety than before. Actually, one big issue of nuclear power station is not the quality of facilities, but the quality of staff running those nuclear facilities, evidenced the "Three Mile Island Accident" in the US. Lack of quality staff could impose the real constraint on China's nuclear plan. Finally, though the ban is temporary and we think the overall plan (39Gw in 2015 and 86Gw in 2020) won't be significantly impacted, market sentiment could nevertheless be very different.

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