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Asia turns to nuclear energy to fight power shortages

DESIGNERS and developers of nuclear power stations seeking career opportunities at the beginning of the 21st century are looking to Asia.

Given its dynamic economic growth, the region offers the only potential large market for new reactors, with China and India offering the greatest opportunities.

The big nuclear building programmes which dominated western Europe and North America in the second half of the last century have ground to a halt as growth in electricity demand has levelled out and public concerns over safety, high development costs and decommissioning liabilities have risen.

That does not apply to Asia's emerging economies, where demand for electricity often outstrips supply. China and India, which rely heavily on coal for their power generation, also are turning to nuclear to combat growing pollution.
Renewable electricity is an option, but fails to provide the big hits or the prestige that governments believe will come from competing with the nuclear power of the west.

Wealthier nations like Japan and South Korea, which lack their own natural resources and have already developed large nuclear industries, are more concerned about their potential vulnerability to world oil and gas markets. Already some 39 per cent of electricity, in both countries, is generated from 54 reactors in Japan and 19 in South Korea.

Still, both governments have plans to build more nuclear plants. The outcome is less clear in Japan where public opposition has risen, following several accidents at power plants in the 1990s and the falsification of safety reports at Tokyo Electric Power Company, which led to the temporary closure of many of its reactors.

These concerns have not deterred other regional governments. According to the World Nuclear Association (WNA), east and south Asia currently has "about 100 nuclear reactors in operation, 20 under construction and plans to build about a further 40". In western Europe, by contrast, only Finland has firm plans to develop one new reactor, while the US is merely working on tentative proposals to develop a new generation of nuclear reactors.

China offers the greatest potential for new development, says the WNA. The country currently has nine reactors with a combined capacity of 6,500 megawatts, supplying just under 2.0 per cent of electricity. It proposes to invite international tenders before the end of this year for four further reactors, each of about 1,000 megawatts and costing about $1.5bn. This would be in addition to two 1,000-megawatt VVER Russian reactors under construction at Taiwan.

The power stations form part of a longer-term plan to raise China's nuclear capacity to just under 40,000 megawatts by 2020. "The $30bn development programme will require the construction of about two reactors a year", says the WNA, "similar in scale to the large French nuclear construction programme undertaken in the 1980s".

Bidders for the next four Chinese reactors -- at Yangjiang in Guangdong province, and Sanmen in Zhejiang province -- are expected to include Areva, the French nuclear developer and Atomic Energy of Canada. Areva owns 66 per cent of Framatome which supplied four earlier reactors in Guangdong province at Lingao and Daya Bay while ACE supplied Candu reactors at Qinshan close to the new Sanmen site.

Other potential bidders could include General Electric of the US, Toshiba, Hitachi and Mitsubishi of Japan, as well as Westinghouse, the US nuclear developer now owned by British Nuclear Fuels. South Korea, which has created its own nuclear manufacturing capacity on the back of technology developed by Westinghouse, is also hoping to break into the Chinese market.

China plans to follow South Korea by developing its own nuclear industry. The latest tenders, according to the state-owned China National Nuclear Corporation, will follow the principle of 'our market for your technology'.

South Korea, which has 19 reactors currently supplying almost 16,000 megawatts with another 960 megawatts under construction, proposes to build a further eight reactors totalling 9,200 megawatts. Electricity demand has increased by more than 9.0 per cent a year since 1990.

Japan, meanwhile, has outlined plans to develop another 12 reactors with a combined capacity of 14,400 megawatts, although Japanese executives say proposals have been scaled down and the WNA is not convinced that all will be built.

India is the next biggest potential market behind China. It has 14 mostly small reactors with a capacity of 2,500 megawatts, another nine providing a further 4,000 megawatts under construction and long-term plans to build another 24 with a capacity of more than 13,000 megawatts.
India, like Pakistan, has refused to sign the international nuclear proliferation treaty. As a result, the two countries have largely been excluded from trade in nuclear plant or materials. This has not prevented India from developing its own indigenous nuclear energy industry which has become "self-sufficient in reactor design and construction", according to the WNA.
FT Syndication Service

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