The Future of Nuclear Power in China

The People’s Republic of China is today the biggest platform in the world for the deployment of nuclear technology to generate electric power. In less than twenty years, China has increased its population of operating nuclear power reactors from three to thirty-eight, with eighteen more plants under construction. China currently accounts for more than half of the world’s new nuclear power investment. In 2018, only the United States and France operate more nuclear power plants than China. According to current expectations, Chinese nuclear power production may surpass the United States, which has led the world in nuclear power generation for over half a century, sometime before 2030.

Following from China’s success with nuclear power so far, external experts in government and industry generally anticipate that China will continue to successfully manage and move forward with its nuclear energy program in the coming decades. Especially in that case, decisionmaking in China’s nuclear sector will likely significantly impact the global long-term outlook for nuclear power and the architecture of the nuclear fuel cycle; competition for nuclear exports; nuclear technology holders’ strategic leverage over trading partners; and international nuclear governance.

Regardless of its future outcomes, China will profoundly influence what the rest of the world believes about nuclear power and the nuclear fuel cycle. China aims to transition from conventional nuclear power reactors to a fully closed nuclear fuel cycle based on fast breeder reactors, spent fuel reprocessing, and the use of recycled plutonium fuel. If China fails, it will reinforce conventional thinking in some countries that nuclear fission is a transitional energy technology likely to be replaced this century by other sources. If China succeeds, prevailing low expectations for nuclear power may instead be dramatically revised. Other states may follow China’s lead in projecting that nuclear power will be sustainable for centuries and that the risks associated with an industrial-scale “plutonium economy” are socially, economically, environmentally, and politically acceptable.

China’s industry is poised to invade the world’s nuclear goods markets. Continued Chinese success in nuclear power will add to the challenges faced by a nuclear industry in the West that is in deep trouble. Chinese state-owned enterprises (SOEs)—which were, until recently, expected to become “second tier” suppliers—may penetrate established nuclear power plant export markets. China’s dirigiste business model may give its SOEs supreme competitive advantage over all foreign private sector companies in the nuclear industry. If Chinese business practices prevail, China might eventually become the world’s leading provider of nuclear fuel, nuclear power plants, and nuclear engineering services.

Beijing will obtain strategic leverage where Chinese nuclear firms do business. Chinese success in exporting nuclear equipment, technology, and materials will open the road for China to replicate the success of the United States’ Atoms for Peace program, in spreading its influence into the foreign, energy, and technology policies of China’s nuclear partners and clients. The expense of spreading nuclear commerce, especially to developing countries, might be underwritten by China in support of its strategic interests.

The bigger China’s nuclear power footprint grows, the more say China will have in global nuclear governance. If China in the coming decades becomes the leading nuclear power country, it will demand and obtain a commensurate role in members’ decisionmaking concerning multilateral technical rulemaking compacts and organizations, including the Non-Proliferation Treaty (NPT), the International Atomic Energy Agency (IAEA), and the Nuclear Suppliers Group (NSG). If China closes the nuclear fuel cycle, global governance mechanisms related to nuclear security and nonproliferation may be adjusted to reflect that accomplishment.

While these developments loom on the horizon, the intensified buzzing of China’s nuclear beehive has not escaped the attention of Chinese and international news media. However, the media’s day-to-day focus on new contracts, nuclear industrial partnerships, reactor projects, and record-setting electric power production contribute to a misleading impression that China’s nuclear power program will continue to expand indefinitely and incrementally without challenges, crises, or setbacks.

It is possible that, in the coming years, China’s nuclear industry will not continue on the same robust trajectory as over the last three decades. That may even be likely should other developments transpire, including: the widespread introduction of market reforms into China’s electricity sector that would threaten government subsidies and assistance to the nuclear power industry; a prolonged economic slowdown combined with a deeper shift from capital investment to consumer goods; greater debt and globalization-fed risk aversion; the emergence of nuclear power input bottlenecks; and China’s failure to make the transition from replicating established nuclear technologies to the more advanced, technically complex, and innovative systems that it wants to deploy in the future.

In any event, it would be a mistake to assume that China’s nuclear program will continue on the course it has steered since the 1980s. China built up its nuclear power system under assumptions it made before embarking on profound reforms that tied China to the development of the global economy. Today, the consequences of these reforms—greater wealth, industrial corporatization, economic competition, more diversified growth, and rising expectations for environmental protection and political accountability—will constrain and influence the state’s nuclear energy decisionmaking. To be successful, China’s rulers will have to adjust longstanding nuclear policies and aims to take this evolution into account.

Challenging the West’s Nuclear Industry

The scale of China’s nuclear energy industry alone ensures that how Chinese decisionmakers choose to manage this sector will have a great impact on the world’s nuclear energy systems. By the end of the twentieth century, France’s mature nuclear energy industry operated over fifty nuclear power reactors to supply about 80 percent of the electricity consumed by its population of 60 million people.¹ By contrast, when China connects its fiftieth nuclear power reactor to the grid, which is expected in a few years, China’s nuclear power plants will contribute only about 5 percent of the electricity demanded by its population of 1.4 billion.²

Long before China set its sights on exporting nuclear power plants, the global nuclear industry had begun a process of consolidation that is still in progress. Since the 1980s, firms in Belgium, Germany, Italy, Japan, Netherlands, Sweden, Switzerland, the United Kingdom (UK), and the United States have abandoned the nuclear industry. Today, the nuclear engineering sectors of companies in France, Japan, and the United States, which supplied nearly three-quarters of the world’s nuclear reactors, are in decline and their futures are uncertain. These firms are experiencing low-capacity utilization, rising costs, loss of expertise, and waning political support. Westinghouse Electric Company, a firm in the United States whose technology is the basis for over half the power reactors in the world, was selected by China in 2006 to provide the blueprint for a raft of its future nuclear power plants. In March 2017, after Westinghouse had transferred much technology to China and on the eve going forward with new business with China, the company filed for bankruptcy in the United States, saddled by nearly $10 billion of debt resulting from cost overruns amounting to an estimated $18 billion for two nuclear plant construction projects.³ That followed revelations that Toshiba, a leading nuclear power vendor firm in Japan and Westinghouse’s owner, would post a net loss of $9.9 billion for 2016–2017.⁴ French firm Areva, Europe’s leading nuclear vendor company, which has transferred nuclear power technology to China since the 1990s, recorded cumulative net losses of EUR 7.5 billion from 2014 through 2016.⁵

Should China’s nuclear development remain on track, its industry’s anticipated massive economies of scale and high turnover will also put foreign competitors under even greater commercial pressure. Under President Xi Jinping, the Chinese state has pushed forward with plans to further support and consolidate its SOEs, including companies in the nuclear industry that may be subject to megamergers. Wedding the might of Chinese industry to the central government’s strategic and diplomatic aims, Beijing ordered its nuclear SOEs to collaborate to design Hualong-1, a national champion power reactor model that Chinese companies, at the behest of the state, are expected to aggressively export. In addition, Beijing planners are counting on exports of nuclear power plants to compensate for a marginal downturn in the domestic order books of equipment makers, engineering firms, and construction companies should demand for more reactors in China slow in the coming decades.

China’s Policy Choices and Strategic Implications

Ever since the mid-1980s, China has prioritized the development of nuclear power technologies because central planners considered them to be strategic. After a September 2016 address by Liu Baohua, the nuclear energy director of the China Atomic Energy Authority (CAEA), Chinese media summarized that nuclear power is “not simply an energy source” but is a technology with “other roles” in the Chinese state. Nuclear energy, they wrote, is “an important cornerstone of strategic power, a vehicle for civilian-military integration, and a ‘China card’ to play in the country’s international cooperation diplomacy.”⁶

China views nuclear energy as strategic from several perspectives. The technology for nuclear power generation is derived from the same science and engineering pursuits that are the basis for the reactors, uranium enrichment plants, and spent fuel reprocessing plants used to produce nuclear weapons; indeed, the chain-reaction physics is the same for nuclear weapons and power reactors. A country with advanced nuclear fuel-processing technology for power reactors has the means to produce fissile material for nuclear explosives.

Skills developed and experience accumulated in a country’s civilian nuclear energy applications can be put to use in its nuclear defense programs. The human and capital resources required for a successful nuclear energy program are great, and the timeline for nuclear power projects from conceptualization to decommissioning can be a century or more. Nuclear cooperation and the export of nuclear equipment, technology, and materials are vehicles for states to access and influence other countries’ decisionmaking on technology and energy. The greater a country’s nuclear power infrastructure is, the more a country is able to influence global governance standards for nuclear safety, nuclear security, nuclear trade policy, and nuclear nonproliferation.

Finally, nuclear energy is expected to contribute significantly to China’s intent to further urbanize its population by reducing air pollution in expanding megacities, and to show global leadership in reducing atmospheric carbon emissions. All of these strategic aims will factor into current and future Chinese decisionmaking about its nuclear power program.

From a strategic point of view, there are two reasons in coming decades why China’s most significant nuclear power challenge will be the establishment of an industrial-scale fuel cycle. First, China has since the 1980s aimed to effect a transition from conventional power reactors to a nuclear system based on more advanced fuel cycle technologies, to ensure that nuclear power has a future extending beyond the twenty-first century. Second, the decisions China makes in this area will have profound impact elsewhere. Since the 1960s, efforts to establish a closed fuel cycle in France, Germany, Japan, the UK, and the United States have been shelved or terminated due in large part to public opinion, politics, and market forces. How these same factors will affect Chinese plans to deploy fast reactors and industrial-scale reprocessing plants is not yet known.

This report considers both internal and external factors that can be expected to contribute to Chinese nuclear energy policy making. In addition to overriding and long-term Chinese strategic interests, the most important internal drivers will be China’s industrial policy concerning science and technology development, infrastructure investment, and electricity. The most important external drivers will be the forces of globalization. These could impact China’s nuclear course in two ways: by exposing China’s top-down and technocratic decisionmaking to increased influence from more Chinese stakeholders, and/or by encouraging and strengthening the impact of market forces in China’s economy, including its electricity sector.

Decisionmaking on how China moves forward with nuclear energy development is complex and opaque. There are many actors and many interests. China has on several occasions reshuffled the organizations and hierarchies of its nuclear energy–related authorities and agencies. It can be anticipated that this bureaucratic evolution will continue toward mid-century, beginning with the preparation for China’s next central planning milestones in 2020. Important decisions can be made with little regard for transparency. Indeed Chinese and foreigners have held different views about which Chinese government nuclear agencies are the most important.

So far, the decisions to select and deploy technologies for nuclear power generation have been made by the central government and the Communist Party of China without any significant public input. In recent years, the Chinese public has paid increasing attention to government actions concerning welfare, equity, health, the environment, and safety, including in the nuclear energy sector. Public concerns have multiplied even as Beijing has strengthened nuclear safety oversight. In 2013 and 2016, Chinese authorities canceled plans to build nuclear fuel cycle installations in the immediate wake of local opposition. These cases may be harbingers of greater public intervention in nuclear matters, but it is not a foregone conclusion that the Chinese state will react to public pressure by overturning decisions to proceed with specific nuclear investments—especially if the government considers projects to be in the strategic national interest. Regardless of China’s growing interaction with the outside world, government decisionmaking under Xi has become more centralized, opaque, and unpredictable. His record should caution observers not to expect that a more globalized China will necessarily become more transparent or permit greater public participation in nuclear energy matters.

How China proceeds will likely be decided above all by the central government, as decisionmakers balance policy goals and the interests of actors and institutions, and assess risks and opportunities. This report examines the future of China’s nuclear power development through 2050 by considering both the policy choices and the strategic implications, domestic and global, which include China’s choice of advanced nuclear technology, policymaking in China’s electricity sector, management and assessment of nuclear project and political risk, as well as the prospect for Chinese nuclear exports and China’s nuclear governance.

This report is intended to serve as a vehicle for informing a growing number of stakeholders in China’s nuclear energy program, as well as a broader policy community outside China, about the background, influencing factors, possible outcomes, and significance of the decisions that China will have to make in the coming years. The report does not aspire to predict how China will make these decisions, nor who will make them, nor what the outcomes will be. The report is based on five years of research and information obtained in part from government planning documents, academic studies, financial reports from industry firms, records of conferences and meetings, and Chinese and foreign news media accounts. The report benefitted from uncounted discussions and interviews with government officials, industry executives, economists, scientists, consultants, lawyers, academicians, and civil society experts since 2011. The centerpiece of this project was three annual workshops with Chinese and foreign expert participants concerning the future of China’s nuclear energy program, held from 2014 to 2016 on behalf of the Carnegie Endowment for International Peace, in Beijing, Xiamen, and Berlin.

Notes

¹ “History of Nuclear Power in France” [in French], Fondation d’Entreprises Alcen Pour la Connaisance des Énergies, January 11, 2016, https://www.connaissancedesenergies.org/fiche-pedagogique/histoire-de-lelectronucleaire-en-france.

² David Biello, “China Forges Ahead With Nuclear Energy,” Nature, March 29, 2011, http://www.nature.com/news/2011/110329/full/news.2011.194.html.

³ Mark Hibbs, “Does the U.S. Nuclear Industry Have a Future?,” Carnegie Endowment for International Peace, August 10, 2017, http://carnegieendowment.org/2017/08/10/does-u.s.-nuclear-industry-have-future-pub-72797.

⁴ Diane Cardwell and Jonathan Soble, “Westinghouse Files for Bankruptcy, in Blow to Nuclear Power,” New York Times, March 29, 2017 https://www.nytimes.com/2017/03/29/business/westinghouse-toshiba-nuclear-bankruptcy.html?_r=0.

⁵ Michael Stothard, “Areva Posts €665m Net Loss in 2016,” Financial Times, March 1, 2017, https://www.ft.com/content/e38738f3-a4b5-3b90-9c2b-4ec975a60157.

⁶ Lili Liu, “Administrative Measures for Nuclear Power” [in Chinese], Sina Press, December 9, 2016, http://www.china5e.com/news/news-971094-1.html.

The State Brings Nuclear Power to China

Throughout the thirty-five years that China has built up its nuclear power infrastructure, decisionmakers have been confident that nuclear power is consistent with and contributes to the realization of China’s long-term aspirations and values. Ultimately, most critical decisions have been made by the leadership of the Chinese state and the Communist Party of China. Initiatives launched by hands-on actors—company executives, nuclear scientists, engineers, and planners—to significantly influence the direction of China’s nuclear development have been translated into policy only after they were endorsed at the highest level of government.

China committed to generating electricity using nuclear fission energy with two significant steps. The first, taken in the late 1970s, was to launch initial nuclear power plant construction, and the second was to accelerate it in the mid-2000s. Both times, the country’s supreme leadership took these decisions in consort with technocrats who promoted these actions with specific aims in mind.

China first began investigating nuclear energy during the 1950s, primarily on the basis of bilateral cooperation with the Soviet Union, which led to discussions in the mid-1950s about cooperation on an array of peaceful nuclear research projects including both magnetic fusion energy and fission reactors.⁷ The Chinese Academy of Sciences (CAS), founded on the Soviet model, included an Institute of Nuclear Physics that during the 1950s was engaged in projects with both military and peaceful potential uses. By 1955, discussions on Sino-Soviet nuclear cooperation sidelined peaceful-use projects in favor of pursuing Chinese production of atomic weapons.⁸

Beginning in the 1950s, Mao Zedong gave China’s military establishment a green light to develop atomic weapons and ensure, in his view, that China would not be blackmailed by nuclear-armed imperialist adversaries.⁹ China was by far the poorest and least developed of the states that developed nuclear arms in the years after World War II, and the military defeated advocates of nuclear power in bureaucratic battles waged over the allocation of China’s limited resources for nuclear research and development.¹⁰

In 1964, after six years of dedicated work, China became the fifth country to build and successfully detonate a nuclear explosive device, following the United States (1945), the Soviet Union (1949), the UK (1952), and France (1960). Of these states, all but China quickly followed up their nuclear explosive tests with the construction and operation of nuclear fission reactors to generate heat that could be transformed into electric power.

For a decade beginning shortly after China’s first nuclear explosive test, domestic turmoil unleashed by Mao’s Cultural Revolution sidetracked any efforts to establish a nuclear power program.¹¹ China approved the construction of its first nuclear power station only in 1981—eighteen years after France, the last of the first four nuclear-armed states, had begun producing nuclear electricity.¹²

The road to nuclear power in China was cleared after modernizers and reformers, who had emerged in the Communist Party during the 1970s, took control of the state by the end of the decade. Chinese scientists and electric power technocrats convinced Deng Xiaoping, Zhao Enlai, and other leaders that nuclear power would reduce China’s dependence on polluting coal, boost electricity output in densely populated coastal areas, and permit China to catch up with foreign countries that were far ahead in nuclear technology.¹³ Encouraged by this thinking, Chinese SOEs backed by provincial and local governments built a handful of nuclear power stations with help from foreign industry partners during the 1980s and 1990s.

In 2005, China dramatically magnified its nuclear construction program. As with the initial decision to build power reactors a quarter-century earlier, leaders and technocrats were in agreement. This time, then premier Wen Jiabao shared experts’ view that nuclear energy production should be greatly accelerated and that a nuclear power renaissance was about to take off in advanced countries. Behind the scenes, China’s central planners increasingly advocated nuclear power as an answer to the problems of energy security and pollution that had been unleashed by China’s economic growth.

In March 2005, Wen adjusted the government’s policy on China’s level of nuclear development from “appropriate” to “energetic.” This decision of principle was promptly incorporated into the fine print of China’s Eleventh Five-Year Plan for 2006 to 2010 and then into a newly conceived Medium- and Long-Term Plan for Nuclear Power Development for 2005 to 2020.¹⁴ China set the target of expanding nuclear power generation capacity from seven gigawatts (GWe), achieved in 2005, to 70 GWe in 2020.¹⁵ French, Russian, and U.S. firms were encouraged to compete with each other for the prize of providing the technological blueprint for a series of future nuclear power plants in China. Beijing selected Westinghouse Electric Company and, in 2006, gave the State Nuclear Power Technology Corporation (SNPTC)—a company set up by the State Council of Ministers, the chief administrative authority of China’s central government, to take charge of foreign nuclear power plant technology—approval to sign a contract with Westinghouse for the first four units. In parallel, the leadership of the China National Nuclear Corporation (CNNC), the most important nuclear SOE, prepared to build as many as thirty reactors under the government’s expanding nuclear horizons.

During the two decades between the launch of China’s first nuclear power plant projects and its decisions to accelerate nuclear development, the successive Chinese premiership transitions from Li Peng to Zhu Rongji and then to Wen Jiabao underscored how essential it was that support from the top leadership match technocrats’ advocacy of nuclear power. Li became premier in 1988 after a long career as an electricity manager and vice minister for power, and he unflinchingly championed nuclear energy projects. Zhu, who succeeded Li in 1998, did not share Li’s enthusiasm for nuclear energy. Zhu instead shifted new investment away from nuclear projects and he favored building up China’s petroleum sector and making electric grid improvements. At the end of the 1990s, he imposed a three-year moratorium on power plant construction. In 2003, Wen Jiabao succeeded Zhu and reversed Zhu’s policies on atomic energy. Wen revved up nuclear power plant building, having been convinced by nuclear advocates in the planning and science bureaucracies that this was necessary to put an end to  crippling coal transport bottlenecks that led to electricity shortages.¹⁶ Wen’s decisions in the mid-2000s were in some quarters criticized as an overreaction to short-term events, but they initiated a crash program to rapidly build up China’s nuclear power infrastructure.

China’s top leadership once again directly intervened in the country’s nuclear development six years later, after the severe accident at the Fukushima Daiichi nuclear power plant in Japan in March 2011. This marked the first time that China made decisions about its nuclear program in reaction to external nuclear developments. China’s rulers were not prepared for the self-inflicted destruction of three reactors in Japan. With two dozen reactors operating or under construction in China, the leadership promptly ordered technocrats to take the necessary steps to ensure that a similar accident would not happen.¹⁷

Five days after the accident in Japan, the State Council of Ministers suspended approvals of new nuclear power projects in China and postponed construction of a number of previously approved nuclear power stations. In October 2012, following an internal government debate about nuclear safety that spilled over into the more visible National People’s Congress, China officially proclaimed that construction of nuclear power plants at inland sites—an essential element in China’s plan since the mid-2000s to greatly expand nuclear power beyond China’s crowded coastal perimeter—would be suspended until 2015.

As of 2018, the Fukushima accident has not affected the overall direction of Chinese policy but it nearly immediately precipitated a more conservative approach by the government toward project approval. According to a former Western government official who at the time conferred with Chinese counterparts, the Japanese disaster initially prompted China’s leadership to seriously consider, but ultimately decide against, reversing the course set by Wen in 2005 to build up China’s nuclear power capacity.¹⁸ In the end, the leadership’s response to the accident was a compromise: Beijing halted construction of reactors based on older technology and ordained that only projects featuring new reactor models would be approved. As a result of these decisions, nuclear power plant construction targets for the Thirteenth Five-Year Plan (2016–2020) might not be met on time.

Should plans to build nuclear power plants on inland sites be restored in the Fourteenth Five-Year Plan, China’s nuclear power program may remain on track to cross the 100-reactor threshold sometime during the 2020s. But in the meantime, the State Council’s 2011 decision to selectively suspend nuclear construction and probe the safety of all of China’s nuclear power plants has provided political cover for some officials in central government ministries and industry to assert more openly than at any time since 2005 that the ambitious pace is too risky and should be slowed down.¹⁹ As of 2018, the government had reached no consensus about how many more nuclear power plants China will build in the coming decades. Chinese government agencies, research and development (R&D) organizations, and their consultants project capacity figures for 2050 in a broad range between 150 GWe and 500 GWe. Projections made before Fukushima were more frequently in the 400–500 GWe range. Some projections made after the accident are considerably lower, between 150–250 GWe.

Steadfast Nuclear Policy Components

From the outset, Beijing aimed to establish a stable organizational structure and hierarchy for its nuclear power activities. Over four decades, the central government has called into being, rearranged, and in some cases dissolved a panoply of ministries, commissions, agencies, interagency “leading groups,” and SOEs in an effort to juggle the competing interests of various actors including academic research institutions, nuclear weapons scientists, the military, the mining sector, the power industry, state government central planners, and the Communist Party.

Currently, the State Council of Ministers is the most important authority responsible for making decisions concerning the future direction of nuclear power in China—but its subsidiary agencies have very different interests. During the last two decades, the state has created a number of bodies responsible for nuclear power decisionmaking under the State Council. These include the National Energy Administration (NEA), which is responsible for policy implementation and represents a score of government bodies and departments; the National Development and Reform Commission (NDRC), responsible for planning and infrastructure development; and the National Nuclear Safety Administration (NNSA), which is China’s nuclear power regulatory body. It began as a politically weak department of China’s Ministry of Environmental Protection and has been elevated in status over the last decade. Since 2010, policymaking has been coordinated by a National Energy Commission representing over twenty government departments.

China’s nuclear bureaucratic structure for many years has been sufficiently opaque that foreign governments and Chinese officials involved could not even agree which agencies were in charge. According to one researcher, Western observers were misled for over two decades to believe that nuclear energy policy is largely determined by CAEA. Over time, it claimed for itself numerous policy-related functions. “In practice, none of these functions or categories of work are taken by or carried out by CAEA, except when representing China at the IAEA.”²⁰

Independent of how Beijing arranges and rearranges its official nuclear energy competencies, several overarching energy policy aims with strategic significance have consistently figured in China’s decisions concerning nuclear power development: to assure that a growing China would have sufficient energy; to diversify and more efficiently manage China’s energy fuel resources; to centrally control the process and direction of industrial application of technology; and to reduce atmospheric pollution by reducing the consumption of coal for electricity production.

Regional Development and Fuels Diversification

From the outset, a continuous thread in Chinese nuclear energy planning has been the aim to reduce China’s reliance on burning coal for electricity production and to redress imbalances in the distribution of the country’s energy resources.

China has over 10 percent of the world’s coal reserves but very few other fossil fuel resources, and for many decades it has generated a huge share of its electricity by burning coal.²¹ Nearly three-quarters of China’s coal reserves are in the country’s north and northwest, far from the electricity load centers on China’s eastern seaboard. Between 1975 and 2000, the share of electric power that was generated by China’s coal-fired plants steadily rose from 56 percent to 78 percent.²² Anticipating this trend at the outset of modernization, Chinese nuclear scientists argued that using nuclear energy might mitigate difficulties in transporting ever-greater amounts of coal from China’s interior to urbanizing coastal areas. Zhou Enlai, who was an early convert to this vision, said in February 1970 that, “from a long-term point of view, nuclear power is the only solution for the shortage of electricity in Shanghai and East China.”²³

Zhou’s remarks were prompted by an acute power shortage in Shanghai. Thirty-five years later, another power crisis on China’s seaboard, likewise triggered by inadequate coal supply, encouraged then premier Wen to ramp up nuclear construction. Wen was pressed hard by a key figure, then vice premier Zeng Peiyan, who was convinced that shortages would get worse unless measures were taken to strengthen electricity production not based on coal. That logic implied that China would have to expand both nuclear power and hydroelectric power. Zeng, supported by the nuclear power industry, argued that a nuclear power expansion for the east coast was necessary because most of China’s coal resources were in the north and most hydropower sources were in the southwest, so it took half of China’s rail transport capacity and one third of its river transport capacity to supply seaboard cities with coal to be burned for electricity production.²⁴

Technology and Industrial Policy

At the same time, China’s leadership was wary of political risks associated with unbridled nuclear power development. During the late 1970s and beyond, Chinese policymakers debated whether China should develop its nuclear power infrastructure on the basis of indigenous capabilities—implying that progress would take longer—or instead rely on fast-track cooperation from foreign governments and industries that already commanded the essential technologies and expertise that China sought. Advocates of home grown development included experts from China’s nuclear weapons program who sought to expand into profitable industrial projects. They also felt betrayed by the Soviet Union’s decision to not provide China with a nuclear weapon design in 1959.²⁵ Ultimately, China embarked on a compromise two-track plan in the 1980s that attempted to reap the benefits of foreign technology transfer but also protect the interests of China’s industry.

This dual-track approach also informed the establishment of what would become China’s two most important nuclear SOEs. The first, CNNC, was hived off from Beijing’s former nuclear industry ministry in 1988. CNNC was critical of foreign influence in China’s nuclear development and was selected to spearhead nuclear power plant construction in the Shanghai region. The second firm, China General Nuclear Power Holding Company Limited (CGNPC), was formed in 1994 on orders from Beijing policymakers expressly to facilitate nuclear power development with foreign companies—particularly with French industry—as a counterweight to CNNC.

CGNPC set up a nuclear power plant at the Daya Bay site in Guangdong based on French technology. During this project and immediately after, managers and politicians in Guangdong aimed to expand nuclear construction with French industry to sustain rapidly growing wealth and electric power demand in southeast China. During the 1990s, their efforts were deflected by suspicious central government officials in Beijing; they were concerned that the decisionmaking freedom secured by Hong Kong as a condition of the UK’s 1997 handover to China would spread to adjacent Guangdong.²⁶ These foreign-indigenous and center-periphery tensions and debates inhibited China’s nuclear development throughout the 1990s.

By the end of the century, China’s central government had resolved these issues to its satisfaction. Beijing was thereafter willing to assume the residual risk that more nuclear power plant construction in Guangdong and elsewhere might empower increasingly wealthy and globalized actors to wrest autonomy from or destabilize the central government. In parallel with decisions in the early 2000s that opened China’s nuclear power sector to greater foreign participation, the central government ruled that decisions on making investments in electricity production must be approved by Beijing. Further, the central government presided over an ongoing restructuring of China’s nuclear power industrial sector, which in practice assured that CNNC and its subsidiaries would own shares in virtually all important companies (including rival CGNPC) that were being set up to serve an increasingly technologically deep and geographically broad Chinese nuclear industry sector.²⁷

Since the beginning of its nuclear power program, China’s leaders have made sure that, through SOEs, the central government firmly controls the future direction of nuclear power development, even if the details were left to company executives whose interests might differ. The State Council’s establishment of CNNC and then CGNPC was part of a more general process of reorganizing strategic economic activities under its control; it broke up former defense industry ministries and established SOEs responsible for aviation, aerospace, arms production, shipbuilding, and nuclear energy. In setting up its first nuclear SOE, the State Council tasked CNNC to construct and design nuclear power plants; produce nuclear fuel, isotopes, and military nuclear hardware; and manage nuclear waste. As the nuclear program expanded, the state created more SOEs in the 1990s, including CGNPC.

The State Council’s decisions set in motion a process of corporatization that in some areas has profoundly altered the relationship between the state and China’s nuclear industry. China’s leaders had intended to decentralize, “civilianize,” and render profitable China’s military-industrial complex. In fact, their decisions had the unintended consequence of setting up a contradiction between the state’s intent to open China’s economy to competition while maintaining firm political control over key strategic sectors. Whereas the state aimed to protect its interests in the companies it set up, bargaining relationships formed and persisted “between the state enterprises and their bureaucratic superiors.”²⁸ As time progressed, nuclear firms eventually established parallel decisionmaking structures, and the companies formed relationships with local and provincial governments that had been freed by reforms from Beijing’s tight grip. These developments encouraged nuclear SOEs to develop their own unique interests that were distinct from the state’s, aimed at limiting financial accountability and oversight and promoting overemployment and protectionism.²⁹

Beginning in 1985, the project to set up a small cluster of nuclear power reactors in Guangdong committed French industry to contribute to China’s aggressive localization drive for nuclear power plant construction, equipment manufacture, and operations. In addition, the French side carried out an extensive workforce development program to prepare CGNPC to take over all aspects of the management of nuclear power stations in Guangdong.³⁰ Similar agreements were pressed upon partners in the United States to transfer the technology for Westinghouse-design power reactors to China. More limited localization agreements with similar workforce development programs were forged with partners in Russia and Canada.

Over the course of twenty years, Chinese policy on nuclear technology choice followed most other nuclear power–generating countries by focusing nearly exclusively on light water reactors (LWRs), which were considered the safest bet and in line with international trends. By the mid-2000s, safety concerns about the 400 LWRs operating in the world were diminishing as these units amassed operating experience. China accordingly prioritized obtaining independent intellectual property for this technology.

Electricity and Growth

China’s decision to greatly accelerate nuclear power plant construction in the mid-2000s was prompted in part by broader energy security concerns. Planners remained convinced that China’s capital investment–led growth model would continue to assure high economic growth, provided it was underpinned by a commensurate and increasing supply of base load electricity.

The severe wintertime coal and power shortages on the east coast, which in the 1970s had propelled China’s first nuclear investments, prompted leaders in the early 2000s to overreact. Inside of a year after decisions were made to ramp up, central planners were predicting that China would instead soon face a power surplus.³¹ However, the leadership, true to form, dismissed the surplus as a short-term adjustment and remained confident that the economy—and with it electricity demand—would continue to expand as it had during the last decade. In 1996, then premier Li told the National People’s Congress that China’s 1980 expectation that gross domestic product (GDP) would quadruple by 2000 had been “fulfilled five years ahead of schedule.”³² The next planning targets, in China’s Tenth Five-Year Plan (2001–2005), were accordingly based on expected annual GDP growth of 7 percent, and the Eleventh Five-Year Plan (2006–2011) predicted GDP growth of 9 percent. Both goals were, in fact, exceeded.

With continued high economic growth putting China’s energy resources under strain, planners aimed to reduce China’s overall energy intensity of GDP—the Eleventh Five-Year Plan called for a reduction in energy intensity by 20 percent. But they cautiously anticipated that, as the Chinese got richer and continued to urbanize, the electricity intensity of GDP would comparatively decline far less. Economists employed by China’s power sector expected a long-term close correlation between electricity consumption, urbanization, and GDP, as has been the historical experience of Western industrial economies.³³

Chinese data substantiated this expectation. The percentage of China’s urban population rose from 19 percent in 1980, to 36 percent in 2000, to 56 percent in 2015. China’s per capita consumption of electricity during the same period rose from 281 kilowatt-hours (KWh) in 1980, to 993 KWh in 2000, to about 4,000 KWh in 2015.³⁴ During China’s first two nuclear power decades, growth in Chinese electricity demand very closely matched growth in GDP. By 1995, China overtook the United States as the world’s biggest consumer of electric power. During most of the period following Deng’s reform initiative, China recorded an annual increase in power consumption of about 10 percent. Between 1980 and 2014, Chinese industry actually increased the country’s electricity generating capacity twenty-three-fold, from 60 GWe to 1,360 GWe, an average annual increase of 9 percent.³⁵

China’s aggressive nuclear expansion in 2005 should be viewed considering growth, demographics, and energy fuel security. Inside the government, technocrats who were convinced that China would need more nuclear power worked to prevent more cautious planners at the NDRC from derailing Wen’s “energetic” nuclear development. In 2008, technocrats who strongly believed that China needed a dedicated central government agency to strategically evaluate and coordinate the nation’s energy policies created a National Energy Administration (NEA) staffed at first with fewer than 100 people. According to government sources in China, while initially NEA was not endowed with any real authority, it has since assumed from NDRC the task of outlining future electricity planning targets. Today, NDRC generally follows what NEA proposes.³⁶

Environmental Policy

Modernizers who advocated nuclear energy beginning in the 1970s argued that nuclear power, unlike coal, would not pollute the air. In deciding to accelerate China’s nuclear program, technocrats and the political leadership agreed that nuclear power would marginally reduce growing levels of particulates emitted by coal-fired power plants that were polluting China’s air as a consequence of uninhibited economic growth. Over the ensuing twenty years, China’s leaders demonstrated greater concern about increasing pollution levels and then gradually followed the trend of promoting global awareness of the threat of greenhouse gas emissions. China refrained from committing to reducing carbon emissions during negotiations of the 1999 Kyoto Protocol. But five years later, China singled out nuclear power as a carbon-free energy source worthy of greater investment in the 2004 Medium- and Long-Term Planning Outline for Energy Development, permitting future nuclear technology “leapfrogging.”³⁷

Nuclear power advocates who aimed to fight coal-fired emissions argued that many more nuclear power plants would be required to make a difference. They were right. Through China’s first three nuclear power decades, reactors accounted for less than 3 percent of China’s consumption of electricity fuels. Even after nuclear power deployment was accelerated, China has continued to build many coal-fired power stations. In just five years—between 2005 and 2009—China added coal-fired power-generating capacity equivalent to the total coal-fired capacity in the United States. Between 2010 and 2013, China added another 50 percent of the total U.S. capacity.³⁸ Currently, China burns about four billion tons of coal per year, and for many years will continue to burn tremendous amounts. After fifteen years of forced nuclear power reactor construction and renewable energy technology deployment, the reality is that burning coal will still account for two-thirds of China’s electricity production in 2020.³⁹

In the five-year period before the 2005 decision to speed up nuclear development, coal burning in China had increased by 75 percent, which contributed to China’s failure to meet ten of thirteen pollution control targets for its Tenth Five-Year Plan (2000–2005). China was, by then, the biggest emitter of atmospheric sulfur dioxide (SO₂) in the world. In 2005, China exceeded the emissions ceilings for SO₂ and soot set at the beginning of the plan by, respectively, 42 percent and 11 percent. World Bank data published a year later shows that, by 2005, atmospheric particulate levels in Chinese cities were four times higher than in comparative metropolitan areas in North America and Western Europe.⁴⁰

China’s Nuclear Fuel Cycle

Beginning in the 1980s, in addition to building nuclear power reactors, China made preliminary decisions about what to do with the used fuel and waste that its nuclear power plants would generate. From the outset, China mirrored foreign nuclear programs’ visionary considerations about energy resource management and technological development.

Currently, all the reactors China has built for power generation—like nearly all power reactors worldwide—are so-called thermal reactors that use neutrons that are slowed by a moderator, usually water, in the core of the reactor. Nearly all of these thermal power reactors are LWRs, and all of China’s LWRs are pressurized water reactors (PWRs), the most common type of LWR. Slowing down the neutrons in these reactors increases the likelihood that their collisions with nuclei in the core will result in fission reactions that produce heat, radioactive fission products, and a number of heavy, transuranic elements. The heat is harnessed to produce steam that drives an electric generator. When the concentration of chain-reacting isotopes in the fuel becomes depleted during reactor operation, the highly irradiated (or spent) fuel assemblies, containing the fission products and transuranic matter, are removed from the reactor core and placed into pools filled with water, where the fuel assemblies lose residual heat and radiation levels gradually decrease. When the spent fuel is removed, it is very hot and intensely radioactive, requiring active cooling for several years after it is taken out of the reactor.

Like other countries, China has two basic options for managing its spent fuel from these reactors. China may store the spent fuel indefinitely in water-filled pools and/or in air-cooled dry casks, either at the reactor site where pools are located or at a centralized storage facility serving a number of nuclear power stations. Eventually, the spent fuel must be disposed of in an underground geological repository. Alternatively, China may remove some or all of the spent fuel from storage after a few years and bring it to a reprocessing plant, where the fuel is broken up and dissolved, and various components—uranium, plutonium, other transuranic elements and fission products—are separated and recovered. The plutonium and uranium may then be used to make new fuel. All other materials from the reprocessed spent fuel are collected, stored, and disposed of as waste in a geological repository.

Worldwide, currently about 300,000 metric tons of heavy metal (MTHM) of power reactor spent fuel is being stored, mostly at reactor sites, from over 400 power reactors that have operated since the 1950s.⁴¹ About 90 percent of this spent fuel is stored in water-filled pools and the rest in dry casks. Every year, the world’s power reactors add about 12,000 MTHM to the world’s spent fuel inventory. By 2030, an additional 400,000 MTHM in spent fuel may be generated.⁴²

A small fraction of this spent fuel is annually reprocessed; in the recent past, as much as about 3,000 MTHM per year, but the amount is currently less.⁴³ The reprocessing of power reactor spent fuel involves chopping up the fuel assemblies to expose the uranium dioxide (UO₂) fuel matrix. The fuel is then dissolved in hot nitric acid. The dissolved components of the fuel are then separated from the undissolved residue of fuel cladding and some waste fission products. The dissolved fuel is contacted with organic solutions to separate the nuclear materials. Ideally, these materials, particularly the uranium and plutonium, are recovered. The residual wastes are separately concentrated and mixed with a solid medium, such as vitrified glass, and stored until they can be permanently disposed of in a geological repository. The recovered uranium and plutonium can be recycled as reactor fuel.

In a few countries, led by France, recycling nuclear materials from spent power reactor fuel is a mature industrial activity. During a period of more than twenty years, France has reprocessed over 26,000 MTHM of spent UO₂ fuel. The plutonium extracted from this spent fuel has been combined with uranium and recycled as mixed oxide (MOX) fuel in twenty-two French LWRs and forty reactors worldwide, resulting in natural uranium savings of about 17 percent.⁴⁴

In the majority of countries, governments and industries launched nuclear power programs without initiating specific investments or concrete actions concerning the long-term management of their spent fuel. China was no exception. Beijing, during the late 1970s, looked forward toward the construction of its first nuclear power plant without a plan for managing its spent fuel beyond storing it at the reactor site. For several decades, spent fuel from China’s growing number of power reactors has been stored in water-filled pools located at the plant sites.

When China’s first nuclear power plants were still on the drawing board, the leadership in Beijing was only dimly aware that the discharged spent fuel must be carefully managed for hundreds or thousands of years. By the mid-1980s, as reforms continued unabated under Deng Xiaoping, that situation had considerably changed. Leading technocrats—the most important of whom had been part of China’s nuclear weapons development drive a generation before—had convinced the leadership that nuclear energy technology was critical to China’s long-term future. Beyond the program approved by Deng to build a few power plants equipped with PWRs, these officials crafted a visionary narrative: fast breeder reactors, fueled with plutonium recovered by reprocessing China’s expanding inventory of spent fuel, would provide a potentially unlimited source of energy.

Reprocessing

In 1986, Deng, supported by leading scientists and technocrats from China’s strategic weapons programs, established the National Program for High Technology Development, the so-called 863 Program, to accelerate China’s technological development.⁴⁵ This R&D program financed pilot projects for what was then called “reprocessing for the thorium-uranium fuel cycle” and for development of a fast neutron reactor.⁴⁶ These two projects emerged as cornerstones of China’s ambition to establish a closed fuel cycle.

In 1987, in tandem with preparations for the construction of China’s first two nuclear power plants—the Qinshan-1 station in Zhejiang Province and the two-reactor Daya Bay station in Guangdong Province—Beijing made known that China, like Japan, Russia, and other leading nuclear power countries, would reprocess rather than dispose of its spent fuel, recover the plutonium and uranium, and use these nuclear materials as fuel for reactors. The Bureau of Nuclear Fuel in China’s Ministry for Nuclear Energy informed the IAEA that China would begin by setting up a pilot reprocessing plant by the mid-1990s, followed by an industrial-scale reprocessing plant by the early 2000s, to accommodate spent fuel from Qinshan, Daya Bay, and future Chinese nuclear power plants. Before reprocessing, spent fuel from China’s east coast nuclear power stations would be stored in water-filled pools at nuclear power plant sites for between three and five years. After, the spent fuel would be shipped to a central storage site in “northwest China,” where the spent fuel would be reprocessed in the pilot plant.⁴⁷

China’s plans to set up reprocessing plants closely tracked with advanced nuclear countries’ rationales. All professed that, in the long term, fresh uranium fuel would become expensive and that reprocessing would ultimately lead to safer nuclear waste management, thanks to new techniques for partitioning and separation of radioactive isotopes that would limit the amount of nuclear waste and permit maximum recycling of nuclear materials. Accordingly, officials from the Ministry of Nuclear Energy told the IAEA that China would reprocess its spent fuel for four reasons: 1) to recover uranium and plutonium from spent fuel and use it for nuclear fuel (without reprocessing, “nuclear resources are not utilized in full”); 2) because of high costs for uranium mining, processing, and enrichment in China; 3) because “the ultimate disposal of high-level vitrified [radioactive] wastes is safer”; and 4) to take advantage of the future recovery of other transuranic elements, including neptunium, americium, curium, “and some valuable fission products such as palladium and rhodium, from reprocessing effluents to meet various needs.”⁴⁸

China proceeded with the design and construction of its pilot reprocessing plant, completing and, according to Chinese experts, successfully commissioning it in December 2010—fifteen years later than originally foreseen in the 1980s. Stepwise commissioning of the installation, set up at the military Plant 404 site at Jiuquan in Gansu Province in remote western China, began in 2004 and took seven years. Some delays were administrative, while others were due to difficult cooperation with Russian counterparts after the collapse of the Soviet Union and by quality control issues experienced during plant construction.⁴⁹ Officials at the China Institute of Atomic Energy (CIAE), an R&D institution that since the 1950s had been a leader in China’s nuclear materials science, predicted in 2005 that Wen’s decision to accelerate nuclear power plant construction would delay fuel cycle development further because China would prioritize ongoing PWR-based power plant construction instead.⁵⁰ Chinese experts said after commissioning of the reprocessing plant that the project had benefited from twenty years of R&D experience and China’s successful operation of three reprocessing plants that were built in the late 1950s to separate plutonium for China’s nuclear weapons program and operated until decommissioning in the 1980s.⁵¹

Over two decades, the pilot plant project served as a test bed for certain technical innovations that went beyond the 1950s-vintage technology of China’s decommissioned military reprocessing plants. Beginning in 2004, the pilot plant demonstrated a Chinese-designed bundle shear used to chop the spent fuel. It also tested the process chemistry equipment used to dissolve the spent fuel; it controlled key parameters such as pressure, temperature, feed rates, and separation speed, including by centrifugation; it calculated accounting mass balances for the nuclear materials in the system; it tested the behavior of process chemical equipment for separation; and it measured the rates of plutonium and uranium recovery, decontamination, and purification.⁵²

Some technologies chosen for solvent extraction and purification technology in the pilot plant were different than what had been used in China’s military reprocessing plants. As intended, China has used the plant to develop experience in design and construction of reprocessing installations, train operations personnel, and recover highly enriched uranium from spent fuel irradiated in Chinese materials testing reactors (MTR), as well as recover materials intended for use in future power reactors. According to Chinese experts, the Ministry for Nuclear Energy projected a quarter century earlier that these activities should be carried out in the pilot plant soon after it was commissioned.⁵³

Open-source data suggest that the pilot reprocessing plant was originally conceived to separate at least several tons of plutonium to be used as nuclear fuel during its lifetime operation. The plant’s design, for example, included a head end featuring a pool storage area to accommodate 500 MTHM in spent LWR fuel and 50 MTHM in spent MTR fuel, from versatile high-power research reactors.⁵⁴ Most nonofficial sources estimate the design throughput of this plant as 50 MTHM per year, consistent with the dimension of the spent fuel storage area under the assumption that the plant would routinely operate to recover plutonium and uranium.⁵⁵ However, at some point during its initial operation phase, the pilot plant was no longer intended to routinely or continually generate recovered nuclear fuel materials. In early 2016, a Chinese scientist close to the project said that 50 MTHM would be the maximum amount of spent fuel reprocessed over the plant’s entire lifetime. Other experts said later that year and in 2017 that the cumulative lifetime throughput of the plant will probably be far less than 50 MTHM, perhaps even a small fraction of that amount, depending on whether the plant would be modified. If so, some upgrades would be intended to address unusually high measurement uncertainties for the plant’s nuclear material inventory, attributed to a combination of measuring and process engineering issues.⁵⁶ These statements from Chinese experts are consistent with data reported annually by China to the IAEA on the status of its civilian plutonium inventory, suggesting that the pilot plant has operated infrequently, that very little spent fuel has been reprocessed, and that operation may have been indefinitely halted in 2014.⁵⁷

Fast Neutron Reactors

In 1987, the Ministry for Nuclear Energy reported to the IAEA that an important objective of the pilot reprocessing plant would be to recover plutonium to be made into fuel containing both plutonium and uranium—so-called mixed-oxide or MOX fuel—for future fast breeder reactors.⁵⁸

China’s LWRs are fueled with low-enriched uranium and use water to cool the fuel and slow down (or moderate) the neutrons emitted by the fuel in the core of the reactor to increase the probability that they will cause exothermic fission reactions. Fast reactors do not use water or another substance to moderate the neutrons and so these remain high-energy, or “fast,” neutrons. To use fast neutrons, these reactors need fuel with a higher content of fissile material, either highly enriched uranium or plutonium. If the fuel in the core is surrounded by a “blanket” made of the isotope uranium-238, that so-called depleted uranium can capture fast neutrons emitted by the fuel, and the uranium-238 will be converted to plutonium-239. In this way, a fast neutron reactor can be operated to “breed” large amounts of plutonium that, in turn, can be used as fuel for more fast breeder reactors. Most of the world’s fast reactors have been cooled with liquid sodium, which efficiently transfers the heat generated by fission energy to a turbine-generator system to produce electric power.

China’s resolve to set up fast breeder reactors also tracked decisions that had previously been taken by advanced nuclear power countries beginning in the 1950s. By the time China initiated construction on its first LWRs in the late 1980s, France, Germany, India, the Soviet Union, the UK, and the United States had all embarked on ambitious fast breeder reactor development and construction projects meant to point the way toward a future transition from LWRs to more advanced, complex technologies. Several of these countries had in parallel prepared for the production of MOX fuel for future fast reactors.

Hand in hand with the central government’s 1986 approval of the pilot reprocessing project under the 863 Program, China simultaneously embarked on a project for a pilot fast breeder reactor.

During the 1960s, Chinese researchers interested in fast reactors set up a sodium circuit test loop, a mock-up of a fast reactor circuit that contains hot liquid sodium, and constructed a zero-power installation using uranium. It reached criticality in June 1970, despite political turmoil brewing in China. In the 1970s, technocrats from China’s defense nuclear program persuaded Deng and other leaders that, together with reprocessing, the breeder reactor was justified because the supply of uranium was limited and the cost of processing uranium was high. The same arguments had been put forth by breeder reactor advocates in other countries, under the assumption that nuclear power generation would rapidly expand worldwide and that the United States would establish a uranium cartel to control access to the world’s nuclear fuel supply.

To enhance their claim that nuclear energy belonged in the suite of technologies deemed strategic for China and hence qualified for support under the 863 Program, nuclear scientists mapped out a three-stage, long-term vision for the development of nuclear technology. They forecast that China’s (and the world’s) current LWR-based nuclear power infrastructure would be succeeded by fast breeders fueled by recovered plutonium and uranium, and that this nuclear power system would in turn be succeeded by a still-more-advanced system based on nuclear fusion energy.⁵⁹ Similar visions had been put forth by breeder reactor advocates in other countries, notably India.⁶⁰

In 1986, China included the fast reactor in the 863 Program and built about twenty experimental sodium loops, including two imported from an abandoned fast reactor program in Italy. CIAE and the Beijing Institute for Nuclear Engineering set to work designing the China Experimental Fast Reactor (CEFR). By 1997, assisted by a bilateral cooperation on fast reactors with Russia, the initial design of the CEFR was complete.

The CEFR was the centerpiece of the fast breeder reactor program, designed for an electric power rating of 20 megawatts (MWe). As in the case of the pilot reprocessing plant, China’s pilot fast reactor cooperation with Russia proved challenging and the project experienced severe delays. After twenty years of construction, parallel detailed design engineering work, and equipment procurement, the CEFR finally went critical in July 2010 and was connected to the power grid in July 2011. CIAE announced at the time that the CEFR would make it possible to increase the utilization of uranium fuel by 60 percent compared to current LWRs.⁶¹

Like the pilot reprocessing plant, the CEFR project was carried out to master technology intended for later deployment at an industrial scale. The CEFR was meant to provide China with experience and operations data concerning fuel and material irradiation, safety, and reliability; design feedback; data and experience for equipment development; and experience conducting lab-scale trials of process steps needed for China’s future closed fuel cycle.⁶² Like the reprocessing plant, the CEFR has not routinely operated since it was commissioned, including for reasons related to technical impediments such as clogging in plant circuits.

Strategic Takeaways

When the Cultural Revolution ended, China’s new leaders pursued nuclear power as one of many vehicles to achieve modernization and economic development in their bid to catch up with Western nations. The focus was on nuclear power’s near-term benefits—reliable electricity supply and cleaner air. Officials in China’s nuclear defense program approved Beijing’s plans to reward them with lucrative business opportunities in exchange for downsizing China’s nuclear military-industrial complex, enhancing the concentration on peaceful uses of nuclear power.

Beginning in the 1980s, the prospect of building many more nuclear power plants prompted China’s leadership to consider more strategic and national security aspects in their decisionmaking. Nuclear technologies for power generation and reprocessing were branded as strategic. China’s nuclear R&D sector supported this by arguing that plutonium produced for weapons could provide an infinite supply of electricity, allowing China to match the prowess of advanced technology countries, especially the Soviet Union and the United States.

China’s nuclear military-industrial complex was bundled together by the end of the 1980s. But as economic reforms progressed, the interests of SOEs, central government departments, and provincial governments came to the fore. Beijing viewed the SOEs’ cooperation with foreign firms suspiciously until the end of the 1990s, when it resolved center-periphery conflicts with fast-developing coastal regions in its favor.

Since the 1980s, strategic thinking has predominated in program planning for the development of nuclear fuel cycle know-how and infrastructure in China. For three decades, China focused on pilot projects for fast reactors and reprocessing intended to create a cadre of experts that could match the achievements of foreign advanced nuclear programs. Although this took longer than anticipated, China’s investment in these strategic technologies during this period represented just a small fraction of its massive commitment to conventional power reactor technology.

Notes

⁷ Mori Kazuko, “A Brief Analysis of the Sino-Soviet Alliance: The Political Process of 1957-1959,” Parallel History Project on NATO and the Warsaw Pact, June 2005, http://www.php.isn.ethz.ch/lory1.ethz.ch/publications/areastudies/documents/sinosov/Mori.pdf; Yuanxi Wan, Jiangang Li, and Yican Wu, “Energy Demand and Possible Strategy of Fusion Research in China,” International Atomic Energy Association (IAEA),

http://www-pub.iaea.org/MTCD/publications/PDF/P_1356_CD_web/Papers/Wan%20Paper%20EP%20I-4.pdf.

⁸ John Wilson Lewis and Xue Litai, China Builds the Bomb (Stanford, CA: Stanford University Press, 1988), 65–72.

⁹ Ibid., 35–7.

¹⁰ Xu Yi-chong, The Politics of Nuclear Energy in China (Basingstoke, UK: Palgrave Macmillan UK, 2010), 16–22.

¹¹ The Cultural Revolution did not terminate all Chinese government programs related to high technology development. In 1970, China successfully launched its first space satellite. See Chunjuan Nancy Wei and Darryl E. Brock, eds., Mr. Science and Chairman Mao’s Cultural Revolution: Science and Technology in Modern China (Plymouth, UK: Lexington Books, 2013), 82–4.

¹² Lewis and Xue, China Builds the Bomb, 104–36.

¹³ Xu, The Politics of Nuclear Energy in China, 20–4, 26–7.

¹⁴ Ibid., 60–4.

¹⁵ Hou Jianchao et al., “Government Policy and Future Projection for Nuclear Power in China,” Journal of Electrical Engineering 37, no. 3 (September 2011). After the accident at Fukushima-Daiichi in Japan, the target of 70 GWe by 2020 was reduced to 58 GWe.

¹⁶ Mark Hibbs, “With Demand Below Projections, China May Drop Nuclear Projects,” Nucleonics Week, March 4, 1999; Kevin Platt, “China’s Nuclear-Power Program Loses Steam,” Christian Science Monitor, July 21, 2000, http://www.csmonitor.com/2000/0721/p7s1.html; see also Xu, The Politics of Nuclear Energy in China, 51.

¹⁷ Author communication with Chinese government official, June 2013.

¹⁸ Author communication with Western government official, February 2017.

¹⁹ Author communication with Chinese state-owned enterprise official,

May 2014.

²⁰ Xu, The Politics of Nuclear Energy in China, 82–3.

²¹ Kevin Jianjun Tu and Sabine Johnson-Reiser, “Understanding China’s Rising Coal Imports,” Carnegie Endowment for International Peace, February 16, 2012, http://carnegieendowment.org/files/china_coal.pdf, 3; China Industrial Map Editorial Committee, Industrial Map of China’s Energy (Singapore: World Scientific Publishing Co. Pte. Ltd., 2011), 7. 

²² “Electricity Production From Coal Sources (China, 1971–2014),” World Bank, http://data.worldbank.org/indicator/EG.ELC.COAL.ZS?locations=CN.

²³ Cai Jianping, “Progress of China’s Nuclear Power Programme,” Shanghai Nuclear Engineering Research & Design Institute, 1996, http://www.iaea.org/inis/collection/NCLCollectionStore/_Public/29/024/29024315.pdf, 67.

²⁴ Author communication with French nuclear industry executive, Beijing, 2005; Mark Hibbs, “Chinese Officials Don’t Expect Zhu to Approve New PWR Project,” Nucleonics Week, April 4, 2002, 12–13; Mark Hibbs, “Foreign Vendors Say They Expect China in 2001 to Plan 4-6 Units,” Nucleonics Week, March 30, 2000, 4–6; Ann MacLachlan and Mark Hibbs, “Chinese Industry Reorganization May Continue,” Nucleonics Week, January 6, 2005, 11–12. See also Cai, “Progress of China’s Nuclear Power Programme,” 68.

²⁵ Lewis and Xue, China Builds the Bomb, 60–5.

²⁶ Author communications with Western government officials, London, 1998, and Beijing, 2000.

²⁷ Mark Hibbs, “CNNC Battling With State Council Over Direction of China’s Program,” Nucleonics Week, June 16, 2005, 14.

²⁸ Chao Chien-min and Bruce Dickson, Rethinking the Chinese State: Strategies, Society, Security (London: Routledge, 2001), 11.

²⁹ Ibid., 21.

³⁰ IAEA, Workforce Planning for New Nuclear Power Programmes (Vienna: IAEA, 2011), http://www-pub.iaea.org/MTCD/publications/PDF/Pub1477_web.pdf, 53–62.

³¹ Richard McGregor, “China Heads for Power Glut by 2006,” Financial Times, August 9, 2005, http://www.ft.com/cms/s/0/4f3b629a-090c-11da-880b-00000e2511c8.html.

³² Li Peng, “Report on the Outline of the Ninth Five-Year Plan (1996-2000) for the National Economic and Social Development and the Long-Range Objectives to the Year 2010,” Ninth Five-Year Plan in Retrospect, March 5, 1996,  http://www.china.org.cn/95e/95-english1/2.htm.

³³Zhaoguang Hu, Xiandong Tan, and Zhaoyuan Xu, An Exploration Into China’s Economic Development and Electricity Demand by the Year 2050 (Beijing: China Electric Power Press), 3–6.

³⁴ “Electric Power Consumption (China, 1971-2014),” World Bank, http://data.worldbank.org/indicator/EG.USE.ELEC.KH.PC?locations=CN.

³⁵ Gang He, Jiang Lin, and Alexandria Yuan, “Economic Rebalancing and Electricity Demand in China,” Lawrence Berkeley National Laboratory, November 2015, https://china.lbl.gov/sites/all/files/lbnl-1003799.pdf.

³⁶ Mark Hibbs, “Chinese Industry Reorganization May Continue,” Nucleonics Week, January 6, 2005, 11. Foreign nuclear industry executives told the author that when NEA was created, Chinese nuclear experts were “puzzled about what it was supposed to be doing” since other agencies, especially NDRC, were responsible for important matters including project licensing and electricity pricing. Eventually, NEA assumed nuclear planning tasks previously carried out by NDRC and, according to Beijing government officials in July 2017, NEA is currently responsible for establishing nuclear energy planning targets.

³⁷ Institute for New and Nuclear Energy Technology, “Energy Development Strategy,” in China’s Energy Outlook 2004 (Beijing: Tsinghua University Press), 36.

³⁸ According to a research organization close to the fossil fuel exploiting industry, China in recent years has added new coal-fired power plants to the grid at the rate of one plant every ten days: “As U.S. Shutters Coal Plants, China and Japan Are Building Them,” Institute for Energy Research, April 23, 2015, http://instituteforenergyresearch.org/analysis/as-u-s-shutters-coal-plants-china-and-japan-are-building-them/.

³⁹ Xu Xiaojie, “China Energy Outlook 2020,” Chinese Academy of Sciences, https://www.eia.gov/conference/2014/pdf/presentations/xu.pdf.

⁴⁰ State Environmental Protection Administration/World Bank, Cost of Pollution in China: Economic Estimates of Physical Damages (Beijing: World Bank/State Environmental Protection Administration, February 2007), http://siteresources.worldbank.org/INTEAPREGTOPENVIRONMENT/Resources/China_Cost_of_Pollution.pdf.

⁴¹ “Current Status of Spent Nuclear Fuel,” Australian Nuclear Association, March 2015,   http://www.nuclearaustralia.org.au/wp-content/uploads/2015/04/ANA-Information-Sheet-20150331-Spent-Nuclear-Fuel1.pdf.

⁴² Christophe Poinssot, Bernard Boullis, and Stephane Bourg, “Role of Recycling in Advanced Nuclear Fuel Cycles,” in Reprocessing and Recycling of Spent Nuclear Fuel, ed. Robin Taylor (Cambridge, UK: Woodhead Publishing/Elsevier, 2015), 35.

⁴³ Ibid. Especially as a consequence of Germany’s nuclear phase-out policy and the indefinite post-Fukushima idling of most Japanese nuclear power plants since 2011, it can be anticipated that the amount of spent fuel reprocessed worldwide will decrease through the 2020s.  

⁴⁴ “Avis sur la Transparence de la Gestion des Matieres et de Dechets Nucleaires Produits aux Differents Stades du Cycle du Combustible,” Haut Comite Pour la Transparence et L’Information sur la Securite Nucleaire, July 2010, http://www.hctisn.fr/IMG/pdf/hctisn_rapport_cycle_cle31BE65.pdf.

⁴⁵ “National High-Tech R&D Program (863 Program),” Ministry of Science and Technology of the People’s Republic of China http://www.most.gov.cn/eng/programmes1/.

⁴⁶ D. Zhang, “Generation IV Concepts: China,” in Handbook of Generation IV Nuclear Reactors, ed. Igor Pioro (Cambridge, UK: Woodhead Publishing, 2016), 373–408.

⁴⁷ Jiang Yunqing et al., “Preparing for Reprocessing of Spent Fuel From Nuclear Power Plants in China,” in Nuclear Power Performance and Safety vol. 5: Nuclear Fuel Cycle (Vienna: IAEA, 1987), 639, http://www.iaea.org/inis/collection/NCLCollectionStore/_Public/20/037/20037987.pdf?r=1.

⁴⁸ Ibid., 640.

⁴⁹ Author communications with Western government and Chinese industry officials, Beijing, 2005; Mark Hibbs, “China’s Plutonium Separation Program at Least Three Years Behind Schedule,” Nuclear Fuel, May 1, 2000, 3.

⁵⁰ Mark Hibbs, “Chinese Breeder Reactor Criticality Delayed Until 2008,” Nucleonics Week, August 18, 2005, 6.

⁵¹ Author communications with Chinese nuclear fuel cycle experts, 2011, 2015, and 2016.

⁵² Ibid.; Zhang Tianxiang et al., “The Active Commissioning Process for a Power Reactor Spent Fuel Reprocessing Plant in China,” Chinese Science Bulletin 56, no. 23 (August 2011 ): 2,411–15.

⁵³ Ye Guoan and Yan Taihong, “Development of Closed Nuclear Fuel Cycles in China,” in Reprocessing and Recycling of Spent Nuclear Fuel, ed. Taylor, 534–5; Zhang et al., “Active Commissioning Process.”

⁵⁴ See, for example: Liu Xuegang, “China’s Nuclear Energy Development and Spent Fuel Management Plans,” NAPSNet Special Reports, October 16, 2012, http://nautilus.org/napsnet/napsnet-special-reports/chinas-nuclear-energy-development-and-spent-fuel-management-plans/; and

Yun Zhou, “China’s Spent Fuel Management: Current Practices and Future Strategies,” Center for International and Security Studies, School of Public Policy, University of Maryland, March 2011,  https://www.files.ethz.ch/isn/127378/china_spent_fuel_management_and_reprocessing_draftfeb_2011.pdf.

⁵⁵ “Plutonium Separation in Nuclear Power Programs,” International Panel on Fissile Materials, 2011, http://fissilematerials.org/library/rr14.pdf, 19–29; one 1988 source claimed on the basis of published Russian information that the future plant would have a throughput of 100 kilograms of spent fuel per day: Jason Puckett, “The Status of Nuclear Power Plants in the People’s Republic of China,” U.S. Department of Energy, 1991,  http://www.osti.gov/scitech/servlets/purl/5823192.

⁵⁶ Author communications with Chinese and foreign experts, 2015 and 2016.

⁵⁷ China reported in 2015 that, in 2014, its separated civilian plutonium inventory had increased by about 11 kilograms; it reported that no additional plutonium had been recovered during 2015: “Communication Received From China Concerning Its Policies Regarding the Management of Plutonium,” IAEA, September 19, 2016, https://www.iaea.org/sites/default/files/infcirc549a7-15.pdf; and “Communication Received From China Concerning Its Policies Regarding the Management of Plutonium,” IAEA, August 28, 2015, https://www.iaea.org/sites/default/files/infcirc549a7-14.pdf.

⁵⁸ Jiang et al., “Preparing for Reprocessing of Spent Fuel,” 641

⁵⁹ Xu Mi, “Fast Reactor Technology Development in China; Status and Prospects,” Engineering Sciences, July 18, 2007; Xu Mi, “The Status of Fast Reactor Technology Development in China” (35th Annual Meeting of the Technical Working Group on Fast Reactors, April 22–26, 2002), IAEA, http://www.iaea.org/inis/collection/NCLCollectionStore/_Public/33/046/33046593.pdf; and Xu Mi, “Fast Reactor Technology Development for Sustainable Supply of Nuclear Energy in China” (China International Nuclear Symposium, November 23–25, 2010, Beijing), Brave New Climate, https://bravenewclimate.files.wordpress.com/2011/11/fast-reactors-xu.pdf.

⁶⁰ Rahul Tongia and V.S. Arunachalam, “India’s Nuclear Breeders: Technology, Viability, and Options,” Carnegie Mellon University, December 15, 1997, http://www.contrib.andrew.cmu.edu/~tongia/breeder_Report.pdf.

⁶¹  Xinhua, “China Makes Nuclear Power Progress,” China Daily, October 31, 2012, http://usa.chinadaily.com.cn/china/2012-10/31/content_15862248.htm.

⁶² Zhang Donghui, “Fast Reactor Development Strategy in China” (International Conference on Fast Reactors and Related Fuel Cycles, Paris, January 25, 2013), IAEA, https://www.iaea.org/NuclearPower/Downloadable/Meetings/2013/2013-03-04-03-07-CF-NPTD/5.zhang.pdf.

In 2005, Chinese nuclear R&D planning officials envisioned a so-called three-step scenario for the development of China’s nuclear energy program. This has served as an official point of reference throughout the 2010s including in most recent years in the Standing Committee of the State Council of Ministers.⁶³ The strategy was first openly brought forth in the Medium- and Long-Term Program for Science and Technology Development Plan for 2006 to 2020, which called for China to concentrate on using PWRs through 2020, inaugurate a transition from PWRs to fast breeder reactors from 2020 through 2050, and, beginning about mid-century, add nuclear fusion reactors to its mix of thermal and fast reactors.⁶⁴

China also prepared a Medium- and Long-Term Plan for Development of Nuclear Energy in 2005. Informed by the strategic considerations discussed above, it reflected both the three-step strategy and then premier Wen’s 2005 decision to speed up nuclear power plant construction. Accordingly, this nuclear energy plan concluded that for China to reduce pollution and generate enough power, it must steamroll production of nuclear fission energy through 2050.

Specifically, by 2020, China should have an installed nuclear power generating capacity of 40 GWe (subsequently raised to 70 GWe and then lowered to 58 GWe), representing 4 percent of China’s total installed power generating capacity. The document spells out that most of the added reactors would be PWRs, and that operation of these units would result in a large inventory of spent fuel and contribute to the long-term depletion of uranium resources. Anticipating uranium becoming scarce and expensive, China would commission the CEFR and set up bigger fast reactors, including a 1,000–1,500 MWe unit by 2025. By 2050, China’s nuclear capacity, based on PWRs and fast reactors, would be between 120 GWe (a low estimate where nuclear power would account for 10 percent of China’s projected power generating capacity) and 360 GWe (a high estimate with a 30 percent nuclear capacity share). During the 2020s, China would construct a test fusion reactor, followed in 2040–2050 by an initial fusion power reactor, before transitioning to the third stage, when fusion reactors would complement fast reactors in the second half of the twenty-first century.⁶⁵

Future Reprocessing Plants and Fast Reactors

When R&D scientists in the 1980s urged the government to include reprocessing and the fast reactor in its 863 Program, they also proposed industrial-scale follow-on projects, supported by strategic narratives. China has erected a pilot breeder and a pilot reprocessing plant, and during 2016 and 2017 made further decisions in favor of construction during the 2020s and 2030s of industrial-scale reprocessing plants and power-generating fast reactors.

Fast Breeder Reactor

Upon completion of the CEFR, debate began over the size of a second breeder reactor. The choice was between a 600-MWe reactor and a bigger unit rated at 1,000 MWe or higher. Factors in the decision included China’s relative lack of experience with fast reactors and the future of China’s cooperation with Russia, which had greatly contributed to the CEFR project.

Since the early 2000s, China and Russia had discussed possible construction of one or two Russian BN-800 fast breeder reactors at a site in Fujian Province on China’s east coast. In October 2009, an agreement was signed between CIAE, CNNC, and Russian vendor Atomstroyexport.⁶⁶ The project was shelved for undisclosed reasons. According to Chinese sources, the 800-MWe Russian reactor could not be easily accommodated by a Chinese nuclear industry that had been set up to produce equipment for generating units rated at 600 MWe.⁶⁷

Accordingly, during 2017, China prepared to break ground on a 600-MWe fast reactor construction project at the Xiapu site in Fujian Province by 2018, with the aim of completing the work by 2023. This was, to say the least, an ambitious schedule for a first-of-its-kind advanced power reactor design built in China. In mid-2017, the site was populated by personnel preparing for construction to get underway.⁶⁸ In December 2017, China officially announced that construction had begun.⁶⁹

Absent authoritative public information about this project during recent years, some speculative media reports claimed that CNNC, working with CIAE and the U.S. firm TerraPower, would begin constructing a 600-MWe fast reactor in Fujian using a TerraPower design.⁷⁰ The TerraPower concept, developed in part following past decades of fast reactor R&D at the Argonne National Laboratory in the United States, requires metallic reactor fuel; in its cooperation with Russia in the CEFR, CIAE had focused instead on future use of oxide fuel. However, some of the media reports claimed that CIAE would nonetheless be in charge of fuel development for the TerraPower unit.

CIAE and CNNC instead prioritized an oxide-fueled 600-MWe breeder in Fujian, called the China Demonstration Fast Reactor (CDFR) or CFR-600. They promoted this project to the government to demonstrate equipment design and manufacture, power generation, system reliability, economic performance, and the development of technical standards and codes.⁷¹ The CFR-600 concept design was completed in 2014, but the detailed design was not settled until 2017.⁷² The project is described by some open sources as majority-controlled by CNNC, with other shares held by the China Yangtze Power Company, the Huaneng Nuclear Power Development Corp, and the Xiapu State-Owned Assets Group, an investment company.⁷³

In recent years, CIAE proposed following up the 600-MWe reactor in about 2030 with the first of a series of commercial breeders called CCFR-B, or an alternative version called CCFR-T meant to demonstrate transmutation. In either case, this scheme calls for the construction of many “high-breeding” fast reactors through 2050, which would “replace fossil fuels” between 2050 and 2100.⁷⁴ The December 2017 announcement of construction starting on the 600-MWe fast reactor at Xiapu included information that a bigger reactor, rated between 1,000 MWe and 1,200 MWe, may be approved by the central government in 2020. This implies that construction of this unit might begin in 2028, with the reactor ready to operate in 2034.⁷⁵ Some speculative media sources claim that instead a 600-MWe TerraPower unit may be built after the CFR-600.

During the last decade, CIAE projected that, based on expected growth in electricity demand and the need for non-carbon-emitting power sources, China might in the long term construct fast neutron reactors with an electricity generating capacity between 70 GWe and 200 GWe, compared to a forecast total nuclear capacity in China by 2050 of 400 GWe.⁷⁶ Some of CIAE’s shorter-term projections for fast reactor construction have been just as stunningly optimistic, calling for a 20-percent fast reactor share of a projected 250-GWe total nuclear capacity in China by 2050.⁷⁷ CIAE’s breeder reactor vision foresees China building fast reactors at such a rate by the end of the twenty-first century that, by the second half of the twenty-second century, over 100 units would be operating in the country, permitting “nuclear power to replace fossil fuel.” The Chinese government has not endorsed any of these plans.

When China began prioritizing the breeder in the mid-1980s, a number of countries—France, Germany, Japan, the Soviet Union, the UK, and the United States—had already launched fast breeder programs two or three decades before and operated experimental or pilot fast reactors for a decade or more. By the 1980s, these countries were preparing to set up industrial-scale units rated between 300 MWe and 1,200 MWe, to demonstrate that the technology could be used to generate electricity reliably and economically.

China’s project was intended to tap the Soviet Union’s experience in the design and operation of four fast reactors—BR-5, BOR-60, BN-350, and BN-600. China’s risk in doing this was modest and the potential benefits considerable, since China’s initial goal was limited to gaining enough knowledge to successfully implement a project for a small experimental reactor rated at 20-MWe. This project would replicate others’ previous efforts, incorporate their lessons learned, and, most importantly, include China in the field of advanced nuclear power countries having technology that offered the possibility of virtually unlimited future nuclear fuel supply.

The decisionmaking environment for the fast reactor is quite different today than three decades ago. During the intervening years, none of the above countries succeeded in building and then operating an industrial-scale demonstration fast reactor to produce electricity using plutonium fuel at a self-sustaining cost, and all encountered technical challenges, which translated in some cases into an erosion of political support. The most important issues were sodium fires, equipment and engineering problems, and severe accident concerns. The cumulative impact of these contributed to decisions by governments in France, Germany, Japan, the UK, and the United States not to license planned fast reactor construction projects and/or to prematurely close reactors that were licensed for operation. The record of technical issues that have daunted fast reactor programs since the mid-twentieth century includes the following:

• Steam generator integrity: Sodium reacts violently with air and even more so with water, and fast reactors have experienced very damaging sodium fires on occasions when liquid sodium leaked.⁷⁸ A number of leaks and fires occurred in early-design steam generators in France, the UK, and Russia. Leaks were caused by steam generator manufacturing defects or by cracks in equipment caused by material fatigue and corrosion.
• Other sodium leaks and fires: Many of these leaks were small and were detected by periodic inspections, but larger ones include four leaks at BN-600 involving between 300 kilograms (kg) and 1,000 kg of sodium. A leak of 640 kg of sodium at Japan’s Monju unit resulted in a serious fire, which spread by dispersed sodium aerosols because sodium circuits were not emptied—the sodium containment was not fully inerted and ventilation systems failed to operate.⁷⁹ Leaks were caused by faulty equipment design and by fabrication, materials-related issues, corrosion, and operator error.⁸⁰
• Equipment, materials, and engineering issues: Defective design, inadequate materials, and faulty operating procedures have led to myriad problems in several reactors. Design flaws in some cases caused heat exchangers and pumps to fail. French regulators raised issues concerning the integrity of core support structures. Equipment immersed in sodium proved in some cases inaccessible to inspection, leading to maintenance problems and long outages. Material weakness led some equipment to crack when exposed to sodium for long periods. Control rods failed in reactors in Germany, France, and the UK due to deposits of oxidized sodium aerosols. Some critical equipment in several reactors was initially made with steels that proved vulnerable to cracking in welded hot areas and caused long repair outages. These materials were later replaced by others that are stronger and corrosion-resistant.⁸¹ Similar problems also challenged LWR development. For LWRs these were overcome only after improvements, backed by decades of operation at several hundred reactors, were made. It is possible that over time many or most of these issues faced by fast reactors might be solved, provided however that reactors accumulate sufficient operating experience.
• Incursions of air and impurities: Incursion leads to the formation of solid particulates and other compounds that cause harm by provoking secondary reactions and buildup of deposits. These can cause component damage, so limiting them is essential to assuring long component and system lifetimes and reliability. Fast reactors—SPX in France, PFR in the UK, and BN-600 in Russia—suffered incursion events between 1987 and 1991 that led to long outages. Today, sodium purification equipment is well developed and the risk of incursion might be less.
• Fuel integrity issues: A number of reactors in France, Germany, Russia, and the UK suffered cladding ruptures, especially during initial operation. In some cases, problems were caused by inappropriate austenitic steel used as cladding; in some other cases, they were caused by issues related to the geometry of fuel design. Integrity issues inhibited irradiation to high burnup levels desired for fast reactors. The most serious problems occurred during early years of fast reactor programs. These events have been reduced over time by better fuel design and the use of stronger materials. The basic problem is that burnup levels for sodium fast reactors are three or more times greater than for LWRs, and the fuel must withstand higher temperatures.⁸²

Governments and industries have prioritized addressing the above issues to improve the safety, reliability, and performance of future fast reactors. In some cases, remedial actions were taken at operating reactors. A key area of development is fast reactor steam generator systems: in future reactors, these must be equipped for rapid hydrogen detection and, in that case, they must respond by promptly shutting down and depressurizing affected steam circuits. Future steam generators may also be outfitted with protective casings resistant to extreme sodium-water reactions; safety membranes may limit pressure increases in the case of a sodium-water event. In modern reactors, sodium leaks might be limited by the use of improved materials and by better welding of sodium-boundary equipment.

Beginning in the 1990s, implementation of some of these measures led to a significant reduction in sodium-water interactions at French and Russian reactors.⁸³ But challenges remain: Some equipment and systems in future reactors may be designed to have double walls, but this could cause welding problems in critical components such as steam generators. Other proposed approaches to improve system integrity and safety, such as adding a reactor loop (for example, using molten salt), will likely prove too expensive.

Leaks and fires have prompted improvements in equipment design; operations procedures for sodium circuits; use of redundant leak detection systems; fire protection including emergency emptying of sodium circuits; compartmentalization of sodium areas to inert or cut off ambient air supply in the case of fire; and use of fire-resistant surface materials.

In light of experience, future reactors must be designed with new features: diversified safety systems to mitigate the risk of common-mode failures; improved cores that exclude or limit probability of core collapse leading to a serious accident;⁸⁴ primary circuits limiting buildup of gas; and improved maintenance technology for equipment immersed in sodium, including ultrasonic instrumentation to facilitate inspection. To handle some accident scenarios, it will be necessary to be able to completely remove the reactor fuel load. Other safety challenges include seismic resistance, anti-flood measures, severe accident management, geometric stability of the core, and reliability of control rods.⁸⁵

On balance, technical reliability is a major challenge standing in the way of a commercial future for this technology, including in China. In a few cases, and for limited periods, fast reactors have demonstrated a capacity factor (the ratio of actual electric power output over a period of time, compared to the output that would be achieved if the plant operated at full power rating without interruption) between 50 percent and 75 percent—but to compete with LWRs under market forces, a capacity factor of 90 percent may be necessary. Improving fuel, in-service maintenance, component reliability, and the reduction of sodium-related events will be paramount to achieve this. Most sodium leaks and fires have not strictly speaking been nuclear safety–significant events, but they have greatly contributed to low capacity factors during fast reactor operation.⁸⁶ Experience with the Russian BN-600 suggests that greater reliability in future reactors may be possible: after thirty-five years of operation, the BN-600 has produced two-thirds of the electricity generated by all of the world’s nineteen fast reactors. It has performed at a capacity factor of 77 percent during the last two decades and its licensed lifetime may be extended to sixty years.⁸⁷ The improvements in BN-600 operation are well-known to China’s breeder program through CIAE’s collaboration with Russian R&D institutions.

Industrial Reactor-Building Capacity

Should China go forward with plans to set up advanced nuclear power installations including industrial-scale fast reactors, these projects would be implemented by a nuclear industry that, without interruption since the early 1980s, has been aggressively developed and indigenized with Chinese government assistance and foreign technology inputs. Before 2030, China will likely have set up 100 nuclear power plants on its territory. Especially given China’s relatively low level of economic development until the 1980s, this feat is considerable. But it is not unprecedented. The United States built over 100 nuclear power reactors in about the same amount of time; France built almost sixty units, and Japan nearly that many, over the span of half a century.

Since the 1980s, China has organized its nuclear power industry around a small number of very big SOEs, chief of which are CNNC and China General Nuclear Power Group (CGN, formerly CGNPC). Each of these firms, particularly CNNC, has numerous subsidiaries and owns shares in still more companies, giving them great influence or, in some cases, direct control over most nuclear power investment and construction activity in China. Both CNNC and CGN are vertically integrated companies that invest in, build, and operate nuclear power plants. A third such company was established in 2015, when the State Nuclear Power Technology Corporation merged with China Power Investment Corporation, a leading Chinese utility company, to form the State Power Investment Corporation (SPIC). Until now, these firms have spearheaded all of China’s nuclear power plant construction. Nearly all the nuclear power plants they have built or are constructing are PWRs. Over time, China has succeeded in claiming control over intellectual property rights to this technology. After building nuclear power plants based on foreign technology its owners agreed to share, Chinese firms modified the technology and branded the results as Chinese intellectual property.

In step with the central government’s decisions in the late 1970s to invest in nuclear power and in the mid-2000s to accelerate nuclear power plant construction, China’s heavy industry has built up the capacity to make equipment needed for serial realization of multi-reactor nuclear power plant projects. Investment began during the 1980s to support construction of a line of PWRs that CNNC had pioneered with assistance from a number of foreign industry partners. When China began scaling up this infrastructure to meet the technical demands of bigger units, it encountered difficulties and had to invest more in forging, component manufacture, and quality control. In tandem with the 2005 decision to accelerate the pace of China’s nuclear power construction, five select state-owned power-engineering and heavy equipment–making companies spent $4.5 billion to build up their capacities.⁸⁸ Today, these firms are equipped to annually produce the critical nuclear equipment (sufficient reactor pressure vessels, core internals, and control rod drive mechanisms)—and up to twenty-seven steam generators, thirty primary pumps, and fifteen turbine generators—to equip between eight and ten new nuclear power plants per year.⁸⁹

Should it indefinitely sustain this industrial capacity, China would meet the requirements for a continued expansion of its installed nuclear capacity at all but the highest current projections through mid-century. Estimates from Chinese sources and organizations have varied widely about how much nuclear power capacity should be added during the next three to four decades. Attaining an installed nuclear capacity of 300 GWe by 2050—a baseline reference found in some Chinese studies—would mean adding about eight reactors per year until 2050.⁹⁰ Considered solely on the basis of equipment-making firms’ current capacity, this might be feasible. Compared to the United States, where thirty utility companies and seven vendor firms built a variety of plant designs at a rate of five units per year, China would benefit from ongoing industry standardization and consolidation.

China has also invested in transitioning from PWRs to fast reactors by 2050. Since the late 1960s, CIAE, in cooperation with Russian industry, has been working on fast reactor neutron behavior and thermohydraulics, development of sodium-handling equipment, reactor materials, and fuel. China also set up three dozen experimental facilities and testing circuits for fast reactor R&D, many concerned with the critical field of sodium management. All told, over 100 Chinese institutions are now involved in efforts to set up an industrial-scale fast reactor. Since 2011, this work has accelerated to demonstrate the manufacture of components needed for the 600-MWe-and-larger units and design of critical and specialized equipment for reactor vessel support, seismic isolation, neutron detection, passive reactor shutdown, and remote inspection of equipment under sodium.⁹¹

Because China came relatively late to the fast reactor—and was also behind the curve for designing, constructing, and operating an industrial-scale unit—it can take advantage of lessons learned from earlier foreign projects. The design of the CEFR incorporated operational experience from previous projects on sodium fire mitigation, and the CEFR has better detection and alarm systems, a modern emergency ventilation system, sodium fire suppression equipment, graphite-based fire extinguishers, and steel covers and insulated concrete surface covers.⁹²

China joined multilateral expert groups—the Generation IV International Forum (GIF), the IAEA’s International Project on Innovative Reactors and Fuel Cycle (INPRO), and the IAEA Technical Working Group on liquid metal fast reactors—to benefit from more experienced states’ advanced reactor development programs. GIF was established to support international cooperation on six reactor designs, including sodium fast reactors, and INPRO was established to encourage generic cooperation on reactor and fuel cycle innovations, including fast reactors. They were not, however, intended to develop or share confidential intellectual property, and individual members continue to focus on their own unique, proprietary, and, in some cases, divergent country-specific engineering solutions.

In December 2017, China inaugurated construction of a 600-MWe fast reactor that is scheduled to be finished in 2023. Some experienced fast reactor engineers outside of China suggested that the proposed five-year construction schedule is not realistic because China does not have enough fast reactor design, commissioning experience, and other resources to quickly build an industrial-scale reactor so soon after completing the CEFR. Other sources in China said that the 2023 deadline is considered by the government to be “flexible” due to the pioneering status of the project.⁹³ CIAE itself is aware that the ambitious schedule—and perhaps even its value as a showcase for advanced technology—will be challenging, as Chinese firms are forced to manufacture critical equipment for the reactor before GIF can address related technical issues for the design of more advanced equipment.⁹⁴ Chinese project engineers have likewise warned that the CEFR went over budget twice during implementation because critical components had to be procured from abroad, because China lacked fast reactor project management experience, and because Chinese engineers had few references for the integrated pool-type reactor design that had been chosen.⁹⁵ Some experts interviewed for this report cautioned that the sooner China aims to break ground on the 600-MWe fast breeder demonstration reactor, the less confidence they would have that the project will be completed on schedule. Should China, in light of its limited experience with fast reactor engineering, form foreign partnerships to realize this project, the administration, oversight, and requirements of collaborative decisionmaking would inevitably cause delays.

When the State Council ordered a penetrating nuclear power safety review after the Fukushima disaster, experts identified safety design weaknesses in the just-commissioned CEFR. These included containment issues; inadequate decay heat removal from spent fuel in the case of a long-term loss of power; and loss of heat sink for design basis accidents. Separately, experts found weaknesses in defense against certain severe accident scenarios.⁹⁶

Russian industry—which supplied a considerable share of the technology basis and key equipment for the CEFR—continues to contribute to China’s fast reactor program. The 2009 agreement to build the BN-800 in China is in abeyance,⁹⁷ but China and Russia signed a nuclear cooperation agreement in November 2016 that included future fast reactor development collaboration.⁹⁸

China has also cooperated with the United States on the development of closed fuel cycle technology related to the fast reactor. In 2006, the United States launched the Global Nuclear Energy Partnership (GNEP), a multilateral forum to cooperate on advanced nuclear power–related technologies. China joined GNEP the same year and, in 2007, the United States and China concluded a Bilateral Civilian Nuclear Energy Cooperative Action Plan meant to “collaborate on research to further develop advanced nuclear fuel cycles with the objective of nuclear safety and non-proliferation.”⁹⁹ One working group concerned fast reactor collaboration, and it continued to convene during the 2010s. As part of this, China has enlisted the cooperation of U.S. national laboratories in areas including reactor core physics, modeling of fuel cycles, and development of fast reactor metallic fuel.

As previously discussed, the U.S. firm TerraPower agreed on the outlines of collaboration with CNNC and CIAE on the joint development of a fast reactor, the conceptual design for which relies on previous U.S. experience, principally at Argonne National Laboratory. The extent of U.S. cooperation with China in this field is subject to U.S. export control restrictions.¹⁰⁰ Unofficial media have reported that U.S. export controls on sensitive technology were adjusted by the U.S. Department of Energy to permit sensitive but unclassified technology transfer from the United States to China for the TerraPower project.¹⁰¹ However, according to U.S. officials, security and nonproliferation concerns have prompted political directors in the U.S. government to occasionally discourage U.S. industry and government entities from contributing to some aspects of China’s fast reactor program.

Reprocessing

China’s assertion that it aimed to close the nuclear fuel cycle at the industrial scale meant that, at some point, it would construct facilities to reprocess its spent fuel, make new fuel using the recovered fuel materials—uranium and plutonium—and dispose of the residual wastes generated from reprocessing and fuel fabrication. In 2014, the Chinese government described the government’s policy on management of spent nuclear fuel:

China’s spent fuel management policy is to implement the reprocessing of spent fuel and to extract and recover uranium and plutonium materials, so as to achieve maximum use of resources, reduce the generation of high level radioactive wastes (HLW) and to ensure the safety of spent fuel management and the public safety, and to lower the risks to the future generations.¹⁰²

When China chose Westinghouse over French firm Areva to provide the blueprints for future PWRs in 2006, it also took a step toward the realization of an industrial-scale reprocessing plant to follow the pilot plant then under construction at Jiuquan. Areva and CNNC concluded a memorandum to build a Chinese reprocessing plant based on Areva technology used in installations with a capacity of 800 MTHM per year (MTHM/y) in France and Japan.

Beginning in 2006, the two sides failed for a decade to agree on terms for this project, leading some Chinese experts to favor construction of a smaller plant using indigenous know-how. France and China differed over the price and French officials raised concerns about national security.¹⁰³ U.S. government officials openly objected to China’s designs to establish a commercial-scale reprocessing industry, and discreetly urged France not to go forward with a bilateral reprocessing agreement that might involve the sale of Areva shares to CNNC.¹⁰⁴

According to a Chinese executive, the Communist Party’s leadership formally approved CNNC’s industrial-scale reprocessing plans sometime in late 2014.¹⁰⁵ Since then, technical discussions between French and Chinese government agencies and firms concerning details of the bilateral reprocessing project were conducted on the understanding that an 800-MTHM/y reprocessing plant using Areva technology would be erected by 2032 at one of a number of proposed Chinese locations, and that full-scale operation of the plant would commence by 2035.¹⁰⁶

Senior executives from Chinese reactor-owning organizations said in November 2017 that China intends to carry out both the 800-MTHM/y reprocessing plant project based on foreign assistance and a 200-MTHM/y “indigenous and intermediate-sized” reprocessing plant. Both projects, they said, are called for under official central planning decisions covering the period 2011 to 2020, including the Thirteenth Five-Year Plan, and implementation is subject to ongoing deliberations of the Standing Committee of the State Council of Ministers. According to these officials, the State Council formally decided in December 2016 to make the necessary investments for both industrial-scale reprocessing plants.

Pre-construction site preparation activities began in 2015 on the intermediate-sized reprocessing plant in the Jinta district in Gansu Province, north of Jiuquan. Officials in 2016 described the intermediate-sized plant as having a design throughput of 200 MTHM/y and a completion date of 2025, five years later than originally foreseen.¹⁰⁷

Spent Fuel

So far, virtually none of China’s power reactor spent fuel has been reprocessed, reflecting Beijing’s overwhelming focus on nuclear power plant construction and operation. Instead, China has taken action to store its spent fuel for at least two decades, primarily at the reactor sites. This is consistent with the management of spent fuel in many other nuclear power programs, and China is using technologies for spent fuel storage that are conventionally deployed worldwide.

By 2005, China had accumulated a total of 1,100 metric tons (MT) of spent fuel. By 2020, reflecting the dramatic increase in China’s reactor population, this stockpile should increase sevenfold.¹⁰⁸ Nearly all of China’s power reactor spent fuel is being stored at the power plant sites.

Currently, over half of China’s installed nuclear capacity is based on a standard French PWR model. Spent fuel from these reactors is stored in water-filled pools designed to hold approximately ten years’ worth of spent fuel from normal operation. China is also building PWRs based on the U.S. AP1000 design. Spent AP1000 fuel will be stored in a water-filled pool with the same capacity of ten years of normal plant operation.¹⁰⁹ Since 1992, China has operated a twin-unit Russian-design VVER PWR at Tianwan, which is also equipped with spent fuel pools. In 2016, these pools were reportedly nearly full and Russian industry was tasked with adding more storage capacity during ongoing construction of additional VVERs at the site.¹¹⁰ China’s first uniquely designed power reactor, Qinshan-1, has sufficient capacity at the site to store all spent fuel through 2025; two follow-on units, Qinshan Phase II, have sufficient capacity through 2022.¹¹¹ Storage capacity at existing reactors has been expanded, and new PWRs are equipped with twenty years’ on-site spent fuel storage capacity.¹¹²

In addition to its growing number of PWRs, China is also operating a nuclear power plant called Qinshan Phase III, which is equipped with two CANDU 6 (Canadian Deuterium Uranium) pressurized heavy water reactors fueled with natural uranium. The two reactors discharge about 5,000 small bundles of spent fuel per year. These are stored initially in a water-filled pool with a capacity of just under 38,000 bundles, which is the amount of spent fuel discharged after about seven years of normal operation. Since 2008, China has been constructing a series of modular dry storage facilities at the site for the longer-term storage of this spent fuel. Each module has the capacity for 24,000 spent fuel bundles. China plans to construct a total of eighteen modules, assuring sufficient capacity to store spent CANDU fuel until at least 2042.¹¹³

China has also taken steps to store spent fuel away from the reactors. Both the pilot reprocessing plant at Jiuquan and the intermediate-scale reprocessing plant at Jinta are designed with head-end facilities to receive and store spent fuel prior to reprocessing. The head-end facilities at Jinta and/or Jiuquan may, in the future, be large enough to store several thousand metric tons of spent fuel and could, in principle, be continually expanded should China decide to move larger amounts of spent fuel away from reactor sites that are filling up.¹¹⁴

That option may be under consideration in light of recent political challenges China has experienced. In part related to political and regulatory developments after the Fukushima accident, Beijing has had difficulty securing approval from local and provincial authorities in eastern China to site future centralized spent fuel storage locations on their territories. During the 2000s, the spent fuel wet-storage capacity at Jiuquan was expanded from 500 MTHM to 760 MTHM, but its use was delayed by regulators, which threatened to suspend operations at the Daya Bay nuclear power plant for lack of spent fuel storage capacity. The emergency was alleviated by shunting spent fuel from Daya Bay to the nearby Ling Ao nuclear power plant.¹¹⁵ Before 2030, China will likely need additional storage space to accommodate spent fuel discharged from currently operating nuclear power plants.¹¹⁶

China’s future rate of spent fuel accumulation will depend on how long its existing nuclear power plants are operated, and on how many more nuclear power plants it builds. China expects to continue to add to its nuclear electricity generating capacity in coming years, but the government has not established firm planning targets for installed capacity beyond the end of the Thirteenth Five-Year Plan in 2020. Were China to expand capacity to 150 GWe by 2035, it might accumulate about 21,400 MT of spent fuel by then. If, instead, China expands capacity to 450 GWe, its accumulation would be perhaps about 29,400 MT by 2035.¹¹⁷ By comparison, the United States operated as many as 100 power reactors for over sixty years and its cumulative spent fuel inventory has reached about 70,000 MT.¹¹⁸ The total amount of power reactor spent fuel in the world is currently about 300,000 MT.¹¹⁹

The averted shutdown at Daya Bay over lack of spent fuel storage capacity has led reactor owners to consider the possible consequences of any future short-term bottlenecks and the need for China’s reprocessing plans to be realistic. It is obvious to Chinese planners that an aggressive reprocessing schedule would in theory take pressure off reactor owners and politicians to provide for additional interim spent fuel storage capacity.¹²⁰ Independent of plans to provide for sufficient storage capacity, some reactor owners may experience logistic and regulatory complications arising from changes in in-core fuel management—implying that fuel will remain in the core for longer periods, which increases its heat load and alters its radioactive contents. Chinese executives privately express concerns that, while it proved relatively simple to move spent fuel from Daya Bay to an alternative location, a Chinese reactor owner might be hostage to commercial pressure from competitors, especially CNNC, in a different situation.¹²¹

Unlike Japan, South Korea, or Taiwan—where policymakers are under greater near-term pressure to secure adequate storage for power reactor spent fuel—China is a very big territory with many remote areas. For at least most of this century, China could technically manage all of its power reactor spent fuel by storing it at reactor sites and off-site locations, using water-filled pools followed by dry storage. On the basis of experience and licensing in other nuclear power programs, China could safely and reliably store its spent fuel without alteration through mid-century and for at least several decades beyond. At some future time, however, China will need to make policy and engineering decisions about disposing of its spent fuel in the long term.¹²²

According to China’s nuclear technology development plan, “spent fuel reprocessing is the vital link in the closed fuel cycle, especially for the transition from an advanced thermal reactor to a fast reactor-based fuel cycle.”¹²³ Should China set up a network of industrial-scale fast reactors, each might require an initial inventory of several tons of plutonium, most of which would be loaded into the core. Once the fast reactors begin operating, plutonium will be supplied to the system in two ways: by the reactors converting uranium-238 in driver and blanket assemblies in the reactor cores to plutonium-239 through neutron capture, and by the reprocessing of spent fuel from thermal reactors that continue to operate. Each fast reactor would provide more plutonium than it needs to operate; eventually, each will generate enough plutonium for the initial core of a new fast reactor. The rate of production of excess fissile material in the fast reactor system is called doubling time.¹²⁴ This depends on variables including the total fissile material mass, reactors’ breeding ratio (the rate of plutonium production from fertile isotopes divided by the plutonium consumption),¹²⁵ and the amount of plutonium losses during fuel fabrication and reprocessing. Doubling times might be as short as five years for some aggressive breeder reactor deployment scenarios or as long as twenty years in scenarios where the rate is comparatively relaxed. Some scenarios envisage fast reactors reducing existing plutonium inventories by “burning” more plutonium than they generate; very ambitious breeder reactor deployment scenarios call for deploying many reprocessing plants to accommodate projected plutonium demand. Chinese experts have derived numerous theoretical scenarios and calculations for both burning and breeding plutonium.¹²⁶

In some scenarios, theorists postulate that a country like China might transition from a nuclear power system mostly based on PWRs to a system relying on fast reactors over a period of several or many decades. How quickly a country could effect that transition would depend on its technology resource base (in particular, its capacity to provide fuel cycle infrastructure including reprocessing and fuel fabrication plants), the rate of growth of its electricity demand, and other factors. Theoretically, if a number of nuclear power–producing states attempted to organize a coordinated global transition from LWRs to fast reactors, a sevenfold increase in reprocessing capacity might be required over half a century.¹²⁷

In reality, no country’s nuclear energy program has so far deployed more than one large industrial demonstration fast reactor fueled with plutonium at any time, and a coordinated multinational deployment of fast reactors has never been attempted. Europe and Japan set up reprocessing plants in tandem with successive deployment of pilot and demonstration fast reactors, but the fast reactors were prematurely shut down or not built and the reprocessing plants were used instead to supply plutonium for MOX fuel for existing thermal reactors. Considering this experience, China would need to carefully match the supply of its future plutonium with its real plutonium demand.

Should China go forward with its plan to reprocess its spent fuel, it would follow in the footsteps of a number of other countries, including the United States, France, Germany, Italy, Sweden, Switzerland, Belgium, Netherlands, Russia, and Japan. Most of the world’s reprocessed power reactor spent fuel was handled at reprocessing installations in France. In the 1970s, French government–owned Areva established spent fuel reprocessing and MOX fuel fabrication as a commercial business activity in tandem with France’s decision to accelerate its construction of nuclear power plants. Beginning in the 1980s, Areva built a reprocessing plant complex at La Hague that currently has the capacity to reprocess 1,700 MT of spent fuel per year. As of 2005, about 90,000 MT of the 276,000 MT of spent fuel from civilian nuclear power generation had been reprocessed worldwide. Today, perhaps 120,000 MT in power reactor spent fuel has been reprocessed.¹²⁸

All of the world’s industrial spent fuel reprocessing plants were designed for a technology called the Plutonium Uranium Redox Extraction Process (PUREX), which uses nitric acid to dissolve spent uranium oxide fuel and relies on organic chemicals to extract pure uranium and pure plutonium from the solution. This process was developed after World War II and adopted, beginning in the mid-1950s, over two decades by France, Germany, Japan, the UK, the United States, and the Soviet Union. PUREX succeeded in large part for three reasons: it demonstrated a high recovery rate for plutonium, thanks to the use of the low-cost organic reagent tri-n-butyl phosphate; it supported recycling of recovered uranium; and it solved certain waste management issues more effectively than other alternative processes.¹²⁹

In the 1980s, when Beijing announced it would establish reprocessing infrastructure for its future power reactor spent fuel, China likewise intended to use PUREX technology and designed the pilot plant for PUREX. According to Chinese scientists, PUREX is preferred because it is well understood and is the global industry standard. For the same reasons, scientists say that China has also chosen PUREX as the technology basis for the 200–MT per year (MT/y) reprocessing plant now under construction.¹³⁰

Should spent fuel reprocessing continue as an industrial activity throughout this century, however, PUREX may be replaced before or by 2050 by more advanced technologies for reasons of nonproliferation, economics, waste management, and environmental impact.

On security and nonproliferation grounds, a disadvantage of PUREX is that it generates pure separated plutonium from spent fuel. To address this concern, French scientists developed a process for the co-extraction of actinides (COEX) to retain a uranium/plutonium mixture through the end of the process, in some variations creating a uranium/plutonium blend feedstock for MOX fuel fabrication.¹³¹ This or similar process technology may be designed into new reprocessing plants—including a plant that Areva may build in China—though the COEX process is not without technical challenges.¹³²

Current R&D efforts to go beyond PUREX in China are driven by ongoing improvements and technological developments in reactor technology and power reactor fuel. PUREX was not designed to treat more challenging spent fuel types, such as fuels with high plutonium content, non-oxide matrices, and high discharge burnup (the amount of energy generated in a reactor per initial mass of fuel). The global nuclear industry has over several decades—especially since market forces began encouraging industry to use resources more cost-effectively—increased the burnup levels of power reactor fuel. For mainly economic rationales—reducing the amount of downtime for refueling, reducing the amount of fresh fuel that must be loaded into reactors, and reducing the amount of spent fuel that must be discharged to generate a given amount of energy¹³³—burnup has risen from mid-30 GW days per MT of fuel (GWd/MT) to nearly 50 GWd/MT today.¹³⁴ In the future, the burnup level for some LWR fuels may approach 90 GWd/MT, implying that, by mass, the fuel would be producing three times the amount of energy than during the early years of nuclear power generation.¹³⁵

As burnup increases, spent fuel exhibits higher concentrations of a large variety of fission products, making it more difficult to reprocess. There may be buildup of particulates that resist dissolving. Reprocessing very high burnup fuel may require facilities equipped with additional neutron shielding, designed for a higher rate of solvent degradation, higher operating temperatures, and different materials and processes for high-level waste (HLW) treatment to cope with higher decay heat, higher neutron outputs, and higher inventories of heavy nuclides. China’s nuclear industry and R&D sector are fully aware of these trends. Chinese reactor owners frequently cite ongoing increases in the burnup of spent fuel as a factor in urging policymakers to ensure that, in parallel with planning for reprocessing, China provides for sufficient interim spent fuel storage capacity. At the R&D level, Chinese experts are exploring complex separation scenarios related in part to anticipated future fuel strategies and technologies.¹³⁶

Partitioning and Transmutation

Chinese experts frequently say that waste management, especially partitioning and transmutation (P&T), is a key rationale for both reprocessing and fast reactor deployment.

The goal of P&T is to change the long-lived actinides into fission products and long-lived fission products into significantly shorter-lived nuclides, creating nuclear waste products that decay in a few hundred years compared to untreated waste that would remain radiotoxic for over 100,000 years. If successful, P&T would also permit the reduction of HLW inventories and the heat load of geological repositories,¹³⁷ and eliminate most of posterity’s burden for managing today’s waste from nuclear electricity production. In the Chinese view, “For advanced reprocessing of future used fuels, the objective is not only to recover plutonium and uranium, but also to manage actinides and fission products.”¹³⁸

Closed fuel cycle technologies are intended to dramatically reduce the radiotoxicity, or the hazard to human cell tissue, posed by spent fuel. Plutonium is the main contributor to long-term radiotoxicity in spent fuel and it can be efficiently removed using PUREX. Other long-lived and poisonous radionuclides that are currently disposed of as waste from PUREX reprocessing include the so-called minor actinides (MA), of which neptunium, americium, and curium are the most significant. Removing the plutonium from spent fuel can reduce the radiotoxic inventory of spent fuel by a factor of ten. If MA are separated and then burned in a fast reactor, the reduction factor might be higher than 100. Neptunium can be removed by adjusting PUREX, but not americium or curium.¹³⁹

However, the nuclear science challenges of P&T are extremely formidable. Recovery of MA is difficult because the chemical properties of these elements are highly similar under conditions that would likely be encountered in a solvent-extraction process. Selective separation of americium and curium from lanthanide fission products, and separating the americium from the curium, are foreseen in some advanced scenarios but the similar chemical behavior of the elements involved make these challenges among the most difficult in advanced reprocessing.¹⁴⁰

A number of processes have been developed that go beyond PUREX to facilitate P&T, but these will only be relevant for nuclear power applications if they can be made to work at the industrial scale and if fast reactor technology is commercialized.¹⁴¹ Scientists hope that the world’s extensive cumulative experience with PUREX will lead researchers to design separation systems likewise based on solvent extraction that will facilitate industrial-scale P&T. Research on the engineering of systems for industrial scale application is being considered.¹⁴²

Caution, however, is warranted because MA separation has been the subject of active research for half a century. Researchers need better engineering tools, including spectroscopic advances, supported by computational techniques to develop processes that are simple and economical enough to be applicable for nuclear power.¹⁴³ Two decades or more may be required before nuclear power might benefit from this P&T research.¹⁴⁴

China and Advanced Reprocessing

Chinese research on P&T started during the early 1980s, and scientists more recently began R&D on an advanced PUREX process, in part to meet the challenge from spent fuel with higher burnup levels.

A key element of Chinese advanced PUREX research is the application of salt-free organic reagents to improve PUREX. One focus is on problems in PUREX related to the behavior of technetium in the dissolved spent fuel that can lead to excessive plutonium accumulation and failure of separation of plutonium and uranium.¹⁴⁵ Another area of Chinese research is to achieve efficient separation of neptunium from the plutonium product stream. Some Chinese efforts on separation chemistry have concentrated on recovery of all actinides—uranium, plutonium, neptunium, americium, and curium—as a group, leaving the shorter-lived heat-emitting elements—cesium and strontium—in the HLW. China has focused on the use of so-called trialkyl phosphine oxides (TRPO) to achieve total actinide recovery from HLW generated from PUREX reprocessing. Some experiments were carried out using this process to treat HLW generated by China’s nuclear weapons program. More recently, China has also designed a process for the separation and recovery of actinides and lanthanides, including separating and recovering strontium from HLW.¹⁴⁶

China is also working on the separation of actinides from lanthanides, and has achieved lab-scale success using chosen extractant organic chemicals.¹⁴⁷ But researchers have also experienced degradation of extractant chemicals from high radiation fields, and this problem must be addressed before China can consider moving toward industrial-scale applications.¹⁴⁸ The Chinese TRPO process was tested successfully in Europe, but it was judged to have drawbacks including extra process steps that may discourage industrial application, certain fission products interfering with the separation, and high nitric acid concentrations in the actinide/lanthanide mixture.¹⁴⁹

Pyroprocessing

Scientists planning for a closed fuel cycle anticipate that after aqueous PUREX reprocessing is mastered, China will develop and deploy a nonaqueous technique called pyrochemical processing, or pyroprocessing, to supply recycled fuel for future fast reactors. Pyroprocessing has been in development since the 1950s, originally by the United States and the Soviet Union in tandem with their fast reactor programs, and is now also being researched and developed in South Korea, Japan, India, and Europe.

In pyroprocessing, spent fuel is chopped, heated, and turned into a powder, which is subjected to high heat that burns off volatile fission products (krypton, xenon, iodine, and cesium). The powder is transformed into a metal that is placed into a bath of molten salts, such as lithium chloride or potassium chloride. The bath with the metallic fuel material is then subjected to an electric current (so-called electrorefining process), and the metal dissolves and separates into component stages. Pure uranium collects at a steel cathode immersed in the bath, and the transuranic material (plutonium, neptunium, americium, and curium) and fission products (cerium, neodymium, and lanthanum) are removed. The uranium is brought to a casting furnace where it is used to make new fuel. The transuranic elements and fission products can be conditioned for disposal in a geological repository or also processed in a casting furnace to make fuel for a fast reactor.

Pyroprocessing chemistry is well-understood. Since metallic fuel would likely be used in future fast reactors because it is more efficient than oxide with respect to heat conductivity and breeding ratio, pyroprocessing may be appropriate since it involves handling of metals at high temperatures. In the GIF program, advocates assert that pyroprocessing has specific advantages for advanced closed fuel cycles. These include: integration of reactor operation, reprocessing, and fuel fabrication; resistance of molten salt and liquid metal solvents to radiation damage for high burnup fast reactor fuels; reduced quantities of waste; and inherent actinide partitioning. The radiation resistance of molten salt implies that fuel cooling times may be shortened. Integration of fuel cycle process steps may lead to more compact installations. Criticality dangers might be reduced because the process will generate relatively impure product fractions.¹⁵⁰

There are also potential drawbacks to pyroprocessing. These include: possible misappropriation of separation technology to produce pure plutonium; the aggressive behavior of molten salts and liquid metals; the material science and maintenance challenges concerning equipment in a commercial-scale plant that must withstand high operating temperatures between 400 and 1,000 degrees Celsius; and the daunting engineering challenges of adapting what has been, until now, a limited-batch process requiring a highly pure environment to handle industrial quantities of spent fuel.

China’s recent engagement in this field has been generic compared to the experience accumulated by the United States, South Korea, and Russia. China has, so far, not processed irradiated nuclear fuel in specially designed pyrochemical research installations. Following the establishment of GNEP in 2006, China and the United States began cooperating on the development of high-burnup fast reactor metallic fuels, casting technology for uranium/plutonium fuel, and pyroprocessing flow modeling.¹⁵¹ Some Chinese experts have suggested that Beijing aims to set up a pyroprocessing facility for spent fuel by 2030 or 2035.¹⁵² To date, however, most Chinese pyroprocessing research is academic and concerns, for example, measurement of basic parameters including on uranium in molten chloride salts, simulations of fuel dissolution in molten salts, and properties of molten salts. China is currently not operating any pyroprocessing installations.¹⁵³ Because CNNC has a monopoly on China’s aqueous reprocessing activities, it was rumored in 2017 that CGN might seek pyroprocessing R&D partners in South Korea; this was denied by CGN officials.¹⁵⁴

Other Advanced Fuel Issues

Should China build and operate fast reactors in addition to its PWRs, it will have to set up infrastructure dedicated to producing fast reactor fuel and reprocessing the spent fuel. Because of differences in radioactivity and isotopic composition, this fabrication and reprocessing activity would be in addition to and separate from China’s ongoing fabrication and reprocessing of spent fuel from PWRs. If China deploys a large fast reactor in the near term, it might reprocess the spent fuel using currently available aqueous technology.

MOX Fuel Fabrication

Unlike LWRs, in which neutrons emitted by the fuel are slowed down by water to increase the probability that they will cause an exothermic fission reaction, breeder reactors rely instead on the greater amount of energy contained in fast neutrons. Sustaining a chain reaction in a fast reactor requires fuels richer in fissile material. In most fast reactors, highly enriched uranium (HEU) or plutonium is used. The fuel is normally either metal alloy or MOX. Russian fast reactors have operated mostly using metallic HEU fuel. Fast reactors in France and Japan have instead used MOX fuel.

MOX fuel currently accounts for about 5 percent of the world’s LWR fuel. So far, about 2,000 MT of MOX fuel has been used in about forty of the world’s 450 power reactors, mostly in Europe, consuming about 10 MT of plutonium per year. MOX use in LWRs has been inhibited by cost compared to natural uranium fuel. Penalties include more complex logistics that are required by the fuel’s radioactive profile, which includes decay of some plutonium into americium (a neutron poison that emits gamma radiation). MOX fuel has been produced at an industrial scale in Belgium, France, and the UK, but it is likely that only France will make MOX fuel for LWRs during the 2020s, joined perhaps by Japan. Russia will make MOX fuel for fast reactors only.

China could, in principle, replicate and build on the experience of these, but it has far to go. China elected to begin operating the CEFR initially with HEU metal fuel provided by Russia, followed by eventual loading of MOX fuel, which would also be used for follow-on Chinese breeder reactors prior to an anticipated transition to metallic fuel.

In 2013, consultants told the Chinese government that China was decades behind other countries in establishing the technical basis for a nuclear power closed fuel cycle.¹⁵⁵ For political reasons, China could not implement a 2010 bilateral agreement with Belgium to replicate its MOX fuel know-how.¹⁵⁶ Without it, China is relying on laboratory equipment installed in 2003, comprising twelve glove boxes and Chinese-made equipment for mixing uranium and plutonium powder, compacting the powder into fuel pellets, and sintering the pellets. This plant was supposed to produce MOX fuel for the CEFR beginning in 2010.¹⁵⁷ As of early 2017, China has not loaded any MOX fuel into a PWR, and it has used very little, if any, in the CEFR. The small scale of China’s MOX fuel fabrication line makes it difficult to assure homogeneity in a large batch.¹⁵⁸ To operate a 600-MWe breeder using MOX fuel, CNNC would need a license to build a MOX fuel fabrication plant with a design throughput of 20 MT/y.¹⁵⁹

Beyond challenges related to MOX fuel, China’s transition from oxide to metallic fuel for fast reactors might begin around 2030 with an initial fabrication capacity for zirconium-plutonium-uranium fuel of 6 MT/y, about a decade after China sets up a pilot fabrication facility for this fuel.¹⁶⁰ Under GNEP, China pursued collaboration with U.S. national laboratories in this direction.¹⁶¹ Following from China’s November 2016 bilateral nuclear cooperation agreement with Russia, it is possible that the two counties may cooperate to develop metallic fuel for China’s fast reactor program. In principle, China could also cooperate with U.S. industry and laboratories interested in the development of metallic nuclear fuel.

Aqueous Fast Reactor Spent Fuel Reprocessing

There are considerable differences between the reprocessing of spent LWR fuel made of uranium oxide and the reprocessing of MOX fuel or metallic fuel that has been irradiated in fast reactors. The plutonium in fast reactor spent fuel can account for between 25 percent and 30 percent of the heavy metal content, compared to less than 2 percent in spent LWR fuel.¹⁶²

Reprocessing fast reactor fuel is beset with a number of specific challenges. High-burnup oxide fuel with high concentrations of plutonium is kinetically and thermodynamically more difficult to dissolve, and the plutonium chemistry interferes with solvent extraction. These fuels can form cruds of noble metal alloys that do not dissolve. Likewise, plutonium-rich particulates from broken up spent fuel may emulsify and pose the threat of a criticality accident. At the laboratory scale, the danger of a serious criticality accident can be far more easily managed than in an industrial-scale installation holding bulk amounts of plutonium. The higher the burnup, the more difficult managing these issues can become. If highly radioactive matter remains undissolved during the initial processing stage, the heat it emits can damage plant equipment if particulates accumulate downstream. Not removing metal cruds will also reduce the efficiency of chemical separation.¹⁶³

Compared to LWR fuels, fast reactor spent fuels also exhibit a higher concentration of fission products. Most can be removed during product purification, but some highly radioactive elements are more difficult to remove. Finally, care must be taken to manage a higher level of solvent degradation during the reprocessing of spent fast reactor fuel, as well as the threat that organic materials requiring removal from the process stream may form explosive nitrate compounds; this problem has caused accidents in Russia and the United States.¹⁶⁴

A limited amount of fast reactor fuel with high plutonium content has been reprocessed in France, the United States, India, Germany, Japan, and Russia. All these countries but Russia used roughly the same chemical process. R&D on fast reactor fuel reprocessing may have accelerated over the last decade in response to GNEP and GIF international programs. Ongoing work includes developing processes that go beyond PUREX chemistry. As with pyroprocessing, the major challenge for aqueous reprocessing of fast reactor fuel will be to arrive at an industrial-scale process that is economical, efficient, and reliable.

Several decades of work may be necessary to reach that goal and, so far, China has little or no direct experience in reprocessing fast reactor spent fuel. China might instead focus on non-PUREX-type fast reactor reprocessing systems, especially pyroprocessing. But this technique, too, is far from being ready to deploy to treat large amounts of spent fast reactor fuel. In recent years China has foreseen possible construction of a plant to reprocess spent MOX fuel with a capacity of 50 MT/y to match the requirement for the 600-MWe breeder reactor now under construction.¹⁶⁵

Recycling of Reprocessed Uranium

In addition to plutonium, China also aims to reprocess spent fuel to recover uranium.

Reprocessing spent LWR fuel recovers both plutonium and uranium. Beginning four decades ago, a number of nuclear power–generating countries experimented with recycling reprocessed uranium (REPU) in their reactors. The amounts of REPU have been growing in step with the amount of spent fuel that has been reprocessed. As of about 2010, the total amount worldwide is estimated to be in the tens of thousands of metric tons.¹⁶⁶ However, the amount of REPU that is recycled is relatively modest. Most is stored, but its use as nuclear reactor fuel—including at an industrial scale in LWRs—has been technically demonstrated. Because REPU contains isotopes that are neutron poisons and emit high levels of gamma radiation, however, use of the material as a commercial fuel raises its effective cost, especially for reactor owners that want to increase the level of fuel burnup. Most countries, therefore, do not aggressively recycle their REPU but consider it to be a future potential asset that would appreciate in value should the price of uranium increase relative to REPU processing and storage costs. For many years, the behavior of reactor owners concerning use of their REPU has been opportunistic: interest in recycling REPU appears positively correlated with concern about the security of uranium supply.¹⁶⁷

For decades, China made no firm plans to use REPU in its nuclear power program pending the introduction of spent fuel reprocessing.¹⁶⁸ In September 2016, leading Chinese nuclear firms signed a memorandum of understanding with Canadian counterparts to design, market, and build a 700-MWe power reactor intended to use REPU as fuel. The reactor design would be a more advanced version of a standard pressurized, heavy-water-moderated-and-cooled power reactor built in Canada and elsewhere, including two units operating in China since the 2000s. According to the Canadian vendor, China would build an initial two reactors; each would use the REPU recovered from the reprocessing of spent fuel from four Chinese PWRs.¹⁶⁹ Chinese experts expect that the foreseen commercial contracts for this project will include transfer of the ownership of technology for these reactor systems to China.¹⁷⁰ Officials close to this project said in 2016 that the spent REPU burned in the Canadian reactors would eventually be used as fuel for one or more Chinese fast reactors, pending the establishment of industrial-scale technology in China for the reprocessing of this spent fuel.¹⁷¹

High-Level Waste Disposal

Regardless of whether China elects to reprocess its PWR spent fuel, it will need to dispose of HLW. China’s nuclear waste repository program resembles programs in other countries. Policymaking for nuclear waste disposal is in the hands of central government bodies: NSSA is the regulator, CNNC is designated as responsible for constructing and managing the repository, and a scientific body, the Beijing Research Institute of Uranium Geology, is in charge of project-related R&D. So far, China has conceived of the project to permit the repository to accept both spent fuel assemblies as well as vitrified reprocessing wastes, from both defense and civilian activities. The basic concept is that waste packages will be disposed of in horizontal shafts connected to tunnels bored into the repository site.

In 2003, after canvassing several possible locations in China for a repository, the government began focusing efforts to establish a geological repository for this waste in granite medium at Beishan in Gansu Province, a remote territory near the Jiuquan complex. During the 2000s, China set 2020 as the target for finishing the conceptual design for the repository.¹⁷² In 2012, after the United States decided to abandon its Yucca Mountain project to dispose of power reactor spent fuel, China expanded the site selection for its future HLW repository to a total of twelve candidate sites. Clay was added to granite as a possible repository medium, and a decision on site selection was foreseen in 2020.¹⁷³

Before repository construction for the selected site can be licensed, China must finish a program of borehole testing, site selection, geological surveys, and studies on groundwater and radionuclide behavior in disposal media. China must also select a source for the bentonite rock that has been selected as a buffer medium for the repository. China plans to technically characterize waste packages, demonstrate the disposal technology, and build a site-specific underground laboratory sometime after 2020.¹⁷⁴ Until the repository is constructed and licensed to accept spent fuel, vitrified reprocessing HLW, and other forms of HLW, China can be expected to store all spent fuel and vitrified waste for an interim period.

Other Nuclear Power Technologies

In addition to fast reactors and their associated fuel cycle technologies, China has invested in other nuclear technologies that could be deployed at a future time for power generation. The designs offer a variety of advantages, including passive safety features, deployment versatility, waste reduction, and lower coolant pressure. All of these reactor types would require the development of specific nuclear fuel management and/or processing technologies. Especially should China halt or slow down the forced development of fast reactors and reprocessing in the near term, China’s nuclear technology focus in the 2020s and beyond may change and evolve, as new technologies emerge and attract interest while other avenues currently being pursued lose traction for technology-driven, political, and economic reasons. In recent years, Chinese R&D organizations and industry have prominently invested in the following future options.

Molten Salt Reactor

China initiated an R&D project during the 1970s to develop a molten salt reactor (MSR) but it made little progress for many years because potentially showstopping materials challenges quickly arose.¹⁷⁵ Beginning in 2011, CAS, which had been initially involved in the MSR exploration, resumed R&D in this field. It currently sponsors a project led by the Shanghai Institute of Applied Physics. If successful, this project will design and build a number of small experimental and pilot units over the next two to three decades, beginning with a pebble-bed reactor that operates on an open fuel cycle using solid fuel. Far more challenging are Chinese aspirations to develop and deploy liquid-fueled reactors that breed uranium-233 from thorium and operate on a closed fuel cycle. In any case, project officials caution that it may take until 2035 or later before a Chinese MSR would possibly operate for industrial-scale power generation.¹⁷⁶

The MSR is a design that uses molten salt as the reactor coolant. The reactor operates at atmospheric pressure (sparing the technical and safety issues that derive from the enormous pressures reached in LWR systems), but at a higher temperature than LWRs, about 700 degrees Celsius. There are two design concepts, one based on solid fuel and the other on liquid fuel—China is interested in both. For the solid fuel design, which calls for tiny fuel pebbles, the salt is comparatively easy to handle using reactor equipment made of standard stainless steels. For the liquid fuel concept, there are complex corrosion challenges related to molten salt.

The MSR’s attributes and challenges will not allow it to replace the LWR at any foreseeable future time. CAS is focused instead on smaller, modular units that may be appropriate for power generation and would include a turbine generator requiring no coolant water.¹⁷⁷ The MSR might, therefore, eventually be suitable for deployment in less-developed and drier regions in central and western China where, in the aftermath of the Fukushima accident, concern has been voiced that not enough local water would be available to assure safe LWR operation.

The CAS-sponsored group is beginning with a comparatively simple pebble-bed, solid-fueled reactor. A waste form for a once-through fuel cycle for this reactor is currently being studied. Unresolved issues concerning a liquid-fueled MSR are far more complex. Before such a reactor could be licensed, much work is needed concerning environmental impact; reactions involving molten salt; and pyroprocessing of the spent fuel and cleaning of the molten salt inventory in the reactor. It is not certain to Chinese experts how waste from a liquid-fueled reactor with a closed fuel cycle would be managed. Should China solve that problem inside two decades, the MSR may have a future impact on the direction of China’s fast reactor R&D, with a design that can burn actinides from spent LWR fuel. But Chinese scientists caution that, even if successful, a thorium/uranium–fueled MSR design may not be in a position by 2050 to rival the population of LWRs and perhaps fast reactors operating on uranium/plutonium fuels—any contribution the MSR would make in this area would be additive.¹⁷⁸

The CAS group envisages the MSR to load thorium in the molten salt and breed uranium-233 by neutron capture. The fissionable uranium that is created and meant to be recycled would be separated by on-line pyroprocessing—a technique that poses considerable difficulties for separating uranium from thorium, including for reasons of chemistry, radiation resistance, compactness, exclusion of reactor moderator agents, compatibility with the molten salt carrier, and nonproliferation.¹⁷⁹ For the Chinese MSR project, a pyroprocessing scheme has yet to be technically conceptualized.¹⁸⁰

ADS and Thorium

China is also interested in developing a so-called Accelerator-Driven System (ADS) using a powerful particle accelerator to transmute actinides and breed uranium-233 in a thorium blanket that would undergo fission and generate power. In principle, the high-energy neutrons generated in a particle accelerator by bombarding target materials could be fired at other targets such as actinides.

ADS was included in China’s National Basic Research Program (the so-called 973 Program) in 1999 after initial studies were carried out between 1996 and 1999. CIAE and the China Institute of High Energy Physics (IHEP) carried out a five-year program on the physics and technology for ADS, and then built an experimental platform. According to one IHEP scientist in 2011, China is “still in the phase of basic research and pre-research for key components” of ADS.¹⁸¹ He said that China will launch a three-phase project, beginning with a ten-year effort to build a high-power accelerator and associated test equipment, followed by construction of a prototype ADS and a 30-MWe reactor and initial transmutation experiments by 2035, and finally building a “full-size industrial demonstration 800-MWe power reactor driven by a 10-MWe beam accelerator” before 2050. Achieving this program, he said, “will take thirty years.”¹⁸²

More recently, the project timetable for this project has been shortened to allow for completion of a demonstration facility by 2032, including a reactor with a rating of over 1,000 megawatts of thermal energy (MWt) capable of generating electricity and processing nuclear power spent fuel and/or HLW. The challenges are daunting and include the target material, the reactor blanket, waste separation, accelerator engineering, and ensuring system reliability at an industrial scale. In March 2016, CAS and nuclear power plant owner CGN—which aims to challenge CNNC’s effective spent nuclear fuel processing monopoly—announced an agreement to cooperate in this field.¹⁸³

According to CAS scientists, currently there is “no existing model in the world” for what China is trying to accomplish on ADS.¹⁸⁴ China is not alone in researching ADS for power applications but the results concerning industrial applications have so far been modest. Accelerators have been designed that operate at only a small fraction of the beam strength necessary to build and operate an ADS functioning as a commercial-scale power reactor.¹⁸⁵ Other countries are continuing with ADS research that has been underway for several decades. Norway, which has large thorium reserves, has been doing thorium-plutonium fuel research for power applications. It concluded in 2008 that industrial application of thorium-based fuel cycle technology including ADS might well be possible in coming decades, but warned that substantial resources (measured in billions of U.S. dollars) would have to be invested to overcome economic disincentives and technical challenges.¹⁸⁶

Alternative Fast Reactor Designs

As part of the CAS ADS project, China is pursuing research on a lead-cooled fast reactor. CAS has proposed this type of reactor as the reference reactor for a Chinese ADS system, in three consecutive phases: 1) design of a 10-MWt research reactor by about 2020; 2) development of a 100-MWt experimental reactor during the 2020s; and 3) development of a 1,000-MWt demonstration reactor through the end of the 2030s. Until now, China’s lead-cooled reactor activities have not been prioritized on par with sodium-cooled fast reactor development.

In 2006, U.S.-based company TerraPower launched an initiative to license and build a proposed so-called traveling wave reactor. The initial version of the reactor called for a core of HEU fuel to undergo fission in a “traveling wave” pattern from top to bottom over a period of several decades, during which time all the fuel would remain in the core; thereafter, it would be removed and disposed of in a repository. The concept was intended to address concerns that spent fuel from conventional reactors, including fast reactors, would be a source of plutonium that could be diverted for nuclear weapons. In 2010, facing licensing difficulties in the United States and searching for a location with required infrastructure to prove that the reactor design was feasible, the company focused its attention on setting up a project in China with the cooperation of Chinese industry and government and supported by the U.S. government.

Since then, TerraPower has significantly altered its reactor concept following discussions with China’s nuclear industry to accommodate the limitations of current technologies, including with respect to materials requirements, possible know-how classification issues in the United States, and the engineering preferences of Chinese organizations.¹⁸⁷ In 2015, TerraPower and CNNC agreed on the outlines of a project to build a reactor in cooperation with China’s fast reactor program. The arrangement would call for CIAE to develop the fuel and the reactor core for a pool-type 600-MWe power reactor, for which CNNC would be architect and engineer.¹⁸⁸

This proposed reactor is a sodium-cooled fast reactor that would initially operate using driver fuel assemblies containing enriched uranium that breed plutonium in a uranium-238 blanket surrounding the core. The reactor would be shut down for one to two weeks per year to shuffle fuel assemblies to optimize operating and safety conditions. The core of the reactor would be replaced every ten years. The irradiated fuel removed from the core is to be re-clad and reused to drive up to three more reactors. The reactor concept would result in less spent fuel than would be generated in an LWR and, according to TerraPower, the spent fuel would be disposed of in a repository rather than reprocessed.¹⁸⁹ TerraPower says that the reactor system is designed to use either depleted uranium or natural uranium but, in principle, it could also use spent PWR fuel in the future.¹⁹⁰

The project draws upon the experience of fast reactor technology development in the United States. Some U.S. experts said that if the project goes forward in the near term, licensing may pose a challenge because there are no international design review criteria. As discussed above, some unofficial reports since 2015 speculated that the TerraPower project would be sited at Xiapu in Fujian Province and built after the CFR-600.¹⁹¹

High-Temperature, Gas-Cooled Reactor

Beginning in 1986, China’s 863 Program included the development of a high-temperature gas-cooled reactor (HTGR) for power generation and process heat applications. On the basis of technology acquired from Germany—including spherical fuel element production—Tsinghua University in 2012 began operating a small pilot high-temperature reactor, HTR-10, north of Beijing. This was followed by an ambitious project to set up a series of twenty bigger modular units to demonstrate the HTGR’s viability for large-scale power generation.

A two-module HTGR-based power plant has been under construction at the Shidaowan site in Shandong Province since 2012. Each module is rated at 250 MWt for a combined power rating of 211 MWe. The project includes technology holder Tsinghua University, general contractor Chinergy, and investor Huaneng, a Chinese utility company. Huaneng abandoned the plan to build twenty HTGR units in Shandong in favor of a new plan to build a six-module station that would be rated at 655 MWe. Officials close to China’s HTGR program said in 2017 that the costs for the 20-unit project were unfavorable compared to PWR costs in China. Huaneng is now building a PWR at the Shandong site.

Like the MSR, the HTGR is still a niche technology facing scaling-up challenges during development. Even if successful, it might not significantly contribute to China’s electric power production for perhaps two decades or more. The further development of the HTGR may be discouraged if China decides to support only nuclear power systems including a closed fuel cycle.¹⁹² Until now, no plans have been made for the reprocessing of spent HTGR fuel in China. Chemical reprocessing of HTGR spent fuel is technically feasible but there is no industrial-scale technology established for this.

More Water-Cooled Reactors

Under China’s 973 Program, a number of universities and industry R&D outlets are working on the development of a so-called supercritical water-cooled reactor (SCWR) that would operate above the critical pressure for water. If successful, the design would allow for higher thermal efficiency than offered by current LWRs, and a simplification of plant design because water flow rates would be lower and no steam-related equipment (steam generator, steam dryers, or coolant recirculation system) would be necessary. The engineering would rely on advanced technology for supercritical coal-burning power plants that China has already mastered. China is actively cooperating in the GIF program on this research, with the goal of producing the finished design for a 1,000-MWe reactor that could be constructed during the 2020s. The SCWR’s fuel cycle options would be the same as for China’s LWRs.

The SCWR has an advantage over other reactors being pursued because it is a water-cooled and water-moderated reactor and thus represents a straightforward evolution from the LWR. But the concept faces challenges in safety-system design and qualification, fuel cladding materials, and heat-transfer technologies, in part related to the reactor’s higher operating temperature and pressure.

Separately, China continues to research and develop PWRs in parallel with its steadily increasing capacity to build and operate these reactors. The support of government policymakers to encourage R&D on fast reactors has not deterred Chinese industry from remaining primarily focused on PWRs. These firms invested heavily in the capacity to build up to ten PWRs annually, and they are counting on central planners to permit them to continue building these reactors in the coming decades. To date, the central government has not announced specific goals for new PWR projects beyond 2020, but the Thirteenth Five-Year Plan includes preparation to start more reactor construction before 2020 and the Fourteenth Five-Year Plan includes additional preparation for an initial eight reactors.¹⁹³ Regardless of the ambitions of fast reactor advocates to begin phasing out PWRs in favor of fast reactors by mid-century, most external industry officials queried said they expect that China will continue to favor building PWRs because that’s what its nuclear engineering sector knows best. Some executives from Chinese reactor-owning firms said in 2017 that, regardless of the development of fast reactor systems, they were confident that the PWR would remain China’s leading power reactor technology throughout this century.

In recent years, the government encouraged CNNC and CGN to combine forces to arrive at a unified design for a 1,000-MWe PWR that China could export beginning in the 2020s. That reactor, Hualong-1 or HPR-1000, is an amalgam of two separate versions of foreign (mostly French) PWR technology that the two companies independently built in series since the 1990s. In the wake of Westinghouse’s difficulties launching its AP1000 PWR in China, it is possible that Hualong-1, or a bigger version of the design, may become China’s standard PWR sometime during the 2020s.

Finally, China is developing small and medium-sized reactors (SMRs) for power generation for specific applications including marine vessels and off-shore and remote terrestrial locations. These include a 125-MWe PWR design that would serve as the basis for a 100-MWe “floating” nuclear power station.¹⁹⁴ SMRs, including HTGRs, may be favored in China to produce electricity for future synergetic hybrid systems relying on both nuclear and renewables, to replace coal-fired capacity, and for deployment in arid regions. These units might be built in factories and then shipped to designated sites for erection.

Controlled Nuclear Fusion Reactor

The three-step nuclear power development strategy proposed for China foresees that, beginning in the 2020s, the country will deploy nuclear fusion reactors, inaugurating the beginning of a third stage of nuclear power development intended to take place between 2050 and 2100 following the industrial-scale deployment of both PWRs and fast reactors.

A fusion power plant would get its energy from the fusion of nuclei of two hydrogen isotopes, deuterium and tritium, to form helium, thereby releasing neutrons and a great quantity of energy. There are two basic approaches: Magnetic fusion aims to heat hydrogen gas that is injected into a cage, to a temperature of about 100 million degrees Celsius, and sustain the reaction using magnetic fields. Inertial confinement fusion attempts to fuse nuclear materials using lasers. China is currently pursuing both avenues.

China began research into magnetic nuclear fusion energy in 1958, but the work was sidetracked in favor of efforts to build nuclear weapons. After China successfully tested a nuclear fission explosive device in 1964, it very quickly moved toward the development of nuclear fusion weapons. China established the capability to produce and work with fusion energy materials—chiefly lithium-6, deuterium, and lithium-6 deuteride—and successfully tested a thermonuclear weapon in 1967.¹⁹⁵

The magnetic fusion project got back on track after 1973 and, since then, has been greatly enlarged to include numerous research institutes.¹⁹⁶ Funding is mostly provided through CAS, the Ministry of Education, and China’s military procurement agency, which has been part of the Ministry of Industry and Information Technology since 2008.¹⁹⁷

During the last two decades, China has set up magnetic fusion facilities including several tokamaks—large magnetic confinement devices to contain hot plasma and produce fusion energy. Today, China is part of the international ITER project to demonstrate the engineering feasibility of the system and show that it is possible to produce energy-yielding plasma. ITER aims to complete this project by about 2025. According to one Chinese fusion scientist, entry into the ITER project was of “strategic importance” for China because it should “raise China’s nuclear fusion technology to the international level” and “lay a foundation for China to independently carry out the R&D for a nuclear fusion demonstration power station.”

The first step would be a 500-MWt experimental fusion reactor that Chinese researchers want to construct and operate by 2035. Between 2036 and 2050, under the ITER program, China would have two options: to build a 1-GW fusion-fission demonstration reactor and then “commercialize fusion energy,” or instead build a 1-GW magnetic confinement fusion demonstration reactor for energy applications.¹⁹⁸ These schedules are consistent with the timetable for China’s three-step nuclear energy development scenario. Scientists say that magnetic fusion would not simply succeed nuclear fission energy production during the second half of the century. Instead, between 2020 and 2050, experimental and demonstration reactors would be designed and operated to breed nuclear fission materials and to transmute high-level waste from fission nuclear power plants.¹⁹⁹

The technical challenges and investment requirements standing in the way of controlled fusion power generation are severe enough to have prompted a number of scientists at CAS to formally object in 2005 to the Chinese government’s decision to fund a dedicated magnetic fusion research project. Unresolved issues include the search for materials that will resist neutron bombardment and confine the radioactivity generated by neutrons as well as radioactive dust and tritium gas. Equipment in a large nuclear fusion reactor for power generation would be subject to extreme mechanical stress and high heat.

Separately, Chinese universities, one of which is affiliated with China’s nuclear weapons program, are pursuing R&D on inertial confinement fusion, which aims to use high-intensity lasers to eventually generate fusion energy for industrial and commercial applications, including power generation. Chinese researchers have developed a group of high-intensity laser drivers to compress target material, with the aim of demonstrating ignition of a target by around 2020.²⁰⁰ If China succeeds, it will enter a narrow field of countries with significant R&D programs that are working on inertial confinement fusion. Several countries have demonstrated ignition of targets, but none has quite yet achieved the high-energy gains needed as a prerequisite to demonstrate industrial and commercial viability. Technical and economic challenges are formidable and construction of industrial-scale inertial confinement fusion reactors to generate electricity may be at least several decades away. It may prove difficult to design and operate a fusion reactor based on pulse-delivering lasers in a truly continuous mode with the high reliability that would be essential for electricity production.

Strategic Takeaways

When China dramatically accelerated its nuclear power program in 2005, it provided a long-term strategic narrative projecting that current technologies would be replaced by two advanced nuclear systems: the fast reactor and the nuclear fusion reactor. China would generate nuclear power for centuries.

In 2005, China was not at the forefront of most of the nuclear technologies it selected for future development. Since then, China has prioritized deployment of PWRs but also intensified support for R&D on fast reactors, nuclear fusion, other fission reactor types, and reprocessing, with the aim of catching up to foreign nuclear programs.

Previous efforts elsewhere to commercialize the fast reactor ran aground on technical and economic difficulties—these might also confound China. Although it can build on post-1990s technical progress in international fast reactor R&D, China is still at a comparatively early stage in areas like fuel processing and fabrication.

China has a mixed record in meeting its nuclear deployment planning goals. It has completed many PWR projects on time, but it has cut back capacity plans that were accelerated in 2005. It has not met timetables in medium- to long-term plans for fast reactors, advanced fuel development, and reprocessing, though these timetables appear intended to be approximate or, as Chinese planners say, “flexible.” China’s failure to meet projected deployment timetables may reflect insufficient political commitment, inadequate financing, and/or technological difficulties. In looking ahead to future endeavors, it should be noted that China currently has comparatively little experience in many of its target areas for nuclear development.

Approaching 2020, Beijing’s plan for nuclear power development, set forth in the 1980s and provided with a timetable in 2005, will be at a technology crossroads. China will have to answer these questions:

• What criteria should China use to decide whether and how to fund advanced nuclear technology development projects? How much should China invest in a future closed fuel cycle, including technologies such as P&T and pyroprocessing that may be critical to China’s long-term nuclear power generation but may not be ripe for industrial-scale deployment for two or more decades?
• Will China’s decisions to support advanced nuclear technologies reduce its commitment to PWR development and safety, putting its PWR infrastructure at risk toward the second half of the century?
• Is China prepared to force the pace of advanced nuclear technology industrial projects regardless of its relative lack of experience in critical areas? Does China’s success in replicating existing PWR technology imply that China will innovate in the development of advanced technology?
• How should China engage foreign governments and industry in the 2020s in pursuit of advanced nuclear technologies? What would a near-term decision by China to deploy a joint prototype industrial fast reactor with U.S. partners imply about the future of its CNNC-centered and, until now, Russian-based fast reactor development program?
• On what basis will China select the most promising advanced nuclear power technologies from those that it is currently funding and politically supporting? How will China make decisions and organize the transition from R&D to industrial-scale and commercial deployment for these technologies?

Notes

⁶³ The Standing Committee of the State Council meets routinely and guides the conduct of business of the State Council; it consists of China’s premier, several vice premiers, and several state councilors: “State Council Organization Chart,” State Council, People’s Republic of China, August 28, 2014, http://english.gov.cn/state_council/2014/09/03/content_281474985533579.htm.

⁶⁴ Weike Cong, “Nuclear Industry in China,” IAEA, 2009, http://www-pub.iaea.org/mtcd/meetings/PDFplus/2009/cn175/URAM2009/Session%201/8_33_Cong_China.pdf.

⁶⁵ Yuanxi, Jiangang, and Yican, “Energy Demand.”

⁶⁶ “China Delays Purchase of Russian Fast Neutron Reactors,” IPFM (blog), International Panel on Fissile Materials, May 18, 2012, http://fissilematerials.org/blog/2012/05/china_delays_purchase_of_.html.

⁶⁷ Author communications with Chinese nuclear energy officials and executives, May 2015 and August 2017.

⁶⁸ Author communication with Chinese nuclear executive, May 2017.

⁶⁹ “China Begins Building Pilot Fast Reactor,” World Nuclear News, December 29, 2017, http://www.world-nuclear-news.org/NN-China-begins-building-pilot-fast-reactor-2912174.html.

⁷⁰ Absent public disclosure from TerraPower and China about their mutual intentions, unofficial media have speculated during the 2010s: Alvin Ybanez, “Fast Nuclear Reactor to Start Construction in 2017,” Yibada, August 17, 2015, http://www.webcitation.org/6dNWyI16E; in 2015, CIAE discussed proposed reactor construction: Zhang Donghui, “Nuclear Energy and Fast Reactor Development in China” (48th Meeting of the Technical Working Group on Fast Reactors, May 24–30, Obninsk), IAEA, https://www.iaea.org/NuclearPower/Downloadable/Meetings/2015/2015-05-25-05-29-NPTDS/Country/4_Nuclear_energy_and_Fast_Reactor_development_in_China.pdf.

⁷¹ Zhang Donghui, “Nuclear Energy and Fast Reactor Development in China”; and Zhang Donghui, “Fast Reactor Development Strategy in China” (International Conference on Fast Reactors and Related Fuel Cycles, January 25, 2013, France), IAEA, https://www.iaea.org/NuclearPower/Downloadable/Meetings/2013/2013-03-04-03-07-CF-NPTD/5.zhang.pdf; CDFR is shorthand for China Demonstration Fast Reactor. During the 2000s, officials referred to the second breeder reactor as CPFR or China Prototype Fast Reactor, suggesting that this unit would be followed by a third reactor that would be expected to operate under commercial conditions. The more recent designation of the project as a demonstration reactor may mean that CIAE intends to “leapfrog” from CEFR to a commercially viable reactor without a prototype, but the acronym CFR would appear to leave the issue unresolved or subject to a pending decision.

⁷² Mark Hibbs, “Rethinking China’s Fast Reactor,” Arms Control Wonk, February 17, 2017, http://www.armscontrolwonk.com/archive/1202830/rethinking-chinas-fast-reactor; officials said China had considered incorporating into the design of the 600-MWe breeder features from other projects, for example, design elements from the U.S. General Electric-Hitachi so-called Prism fast reactor featuring a single steam generator.

⁷³ Website of Fujian Investment and Development Group Co., Ltd., http://www.fidc.com.cn.

⁷⁴ Igor Pioro, Handbook of Generation IV Nuclear Reactors (Cambridge, UK: Woodhead Publishing, 2016), 374–89.

⁷⁵  China Begins Building Pilot Fast Reactor,” World Nuclear News.

⁷⁶ Zhang, “Fast Reactor Development Strategy in China.”

⁷⁷ Xu Mi, “Status and Prospects of Sustainable Nuclear Power Supply in China” (Global 2005 International Conference, Tsukuba, Japan, October 9, 2005).

⁸³ Joel Guidez, “Retour d’Experience de Fonctionnement des Reacteurs Rapides Sodium Dans le Monde” in Phenix: Le Retour d’experience (Paris: Commissariat a l’Energie Atomique, 2012), 294–5.

⁸⁶ J.F. Sauvage, “RNR-Na Prototypes et Industriels: Hier, Aujourd’hui, Demain,” RGN 3 (May–June 2013): https://rgn.publications.sfen.org/articles/rgn/abs/2013/03/rgn20133p50/rgn20133p50.html, 10; see also: Caroline Peachey, “Learning From Phénix,” Nuclear Engineering International, January 8, 2010, http://www.neimagazine.com/features/featurelearning-from-ph-nix/.

⁸⁷ Guidez, “Retour d’Experience de Fonctionnement des Reacteurs Rapides Sodium Dans le Monde,” 293; author communications with U.S. and Russian national laboratory fast reactor officials, Moscow and Beijing, 2015, and Chicago, 2016.

⁸⁸ Statements from Chinese nuclear experts at Carnegie workshop, Beijing, April 2014. 

⁸⁹ Public statement by Zhao Chenghun, vice-chairman of China Nuclear Energy Association (CNEA), April 13, 2015, Tokyo.

⁹⁰ Yun Zhou, “China’s Current Spent Fuel Management and Future Management Scenarios,” Belfer Center, July 2010, http://citeseerx.ist.psu.edu/viewdoc/download;jsessionid=D47A384B2039A14DCC06D387F2A88AE1?doi=10.1.1.651.446&rep=rep1&type=pdf.

⁹¹ Xu Mi, “Fast Reactor Technology R&D Activities in China,” Nuclear Engineering and Technology 39, no. 3 (June 2007): https://www.kns.org/jknsfile/v39/JK0390187.pdf, 187–92.

⁹² Du Hai-ou, “Sodium Fire Protection System,” CIAE Annual Report (Beijing: CIAE, 2006), 10.

⁹³ Views of foreign industry and government experts at Carnegie workshops held in Beijing in 2014, Xiamen in 2015, and Berlin in 2016. At a Harvard University/Tsinghua University workshop held in Beijing in February 2010, a former senior Western country government nuclear laboratory scientist told Chinese experts that in his view CIAE’s plan for five-year construction of an industrial-scale power-generating fast reactor to begin shortly after commissioning of the CEFR was “a plan that appears destined to fail.”

⁹⁴ Xu, “Fast Reactor Technology R&D Activities in China.”

⁹⁵ Yang Hongyi, “Economic Issues of Fast Reactor in China” (Technical Meeting of Fast Reactor and Related Fuel Cycle Facilities With Improved Economic Characteristics, December 9, 2013), IAEA,  https://www.iaea.org/NuclearPower/Downloadable/Meetings/2013/2013-09-11-09-13-TM-NPTD/7.yang.pdf.

⁹⁶ Ren Lixia, “Severe Accident Analysis in CEFR and Technology Gaps” (International Workshop on Prevention and Mitigation of Severe Accidents in Sodium-Cooled Fast Reactors, Tsuruga, Japan, June 11–13, 2012), Japan Atomic Energy Agency, http://www.jaea.go.jp/04/turuga/internationalworkshop/presentationPDF/201206131110Lixia%20Ren_China.pdf.

⁹⁷ Arnaud Lefevre, “Sino-Russian Nuclear Cooperation,” Dynatom, February 2013, http://dynatom.org/wp-content/uploads/2015/01/Sino.-Russian-Nuclear-Cooperation-February-2013.pdf. 

⁹⁸ Hibbs, “Rethinking China’s Fast Reactor.”

⁹⁹ Chungnin C. Wong, “An Overview of the US-China Cooperative on Advanced Fuel Cycle Research,” U.S. Department of Energy, July 1, 2010, http://www.osti.gov/scitech/servlets/purl/1123279.

¹⁰⁰ Author communication with U.S. government officials, Vienna, September 2016. At least through the 2000s, the U.S. government had firmly restricted the scope of technology transfer to China: Mark Hibbs, “U.S. Continues to Raise Bar for Nuclear Cooperation With China,” Nucleonics Week, April 1, 2004, 1.

¹⁰¹ According to unofficial accounts, in November 2013, both directors of CNNC pressed then U.S. secretary of energy Ernest Moniz to loosen restrictions in U.S. Part 810 export controls to permit the export of technology for the TerraPower reactor to China, and in 2015, the U.S. government accommodated that request; changes in the U.S. Part 810 rules are documented here: “Guidance to the Revised Part 810 Regulation: Assistance to Foreign Atomic Energy Activities,” U.S. Department of Energy, February 20, 2015, http://www.webcitation.org/6dNWPYOAE.

¹⁰² “Third National Report for the Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management,” National Nuclear Safety Administration, September 2014,   http://nnsa.mep.gov.cn/gjhz_9050/gjgybg/201512/P020151223562288196956.pdf, 9.

¹⁰³According to European officials in 2010, the French government and Areva would not agree to build a reprocessing plant in China unless the installation were to be put under IAEA safeguards, would not based on available PUREX technology that would result in separated plutonium product, and would not be co-located on a site hosting military nuclear activities. Chinese officials in 2010 told the author that China saw no grounds for having to provide for and pay for IAEA safeguards at the plant since China, like France, was a nuclear weapons-state party to the Nuclear Nonproliferation Treaty. China wanted a PUREX plant because it was familiar with this technology and because it alone had been demonstrated at the industrial level; author communications with European and Chinese nuclear officials in 2010.

¹⁰⁴ Author communications with Western government officials, April and May, 2016.

¹⁰⁵ Author communications with Chinese nuclear executive, 2015.

¹⁰⁶ Ibid.

¹⁰⁷ Author communications with Chinese and foreign government officials, June, August, and September 2016.

¹⁰⁸ Yun Zhao, “China’s Current Spent Fuel Management,” 15.

¹⁰⁹  Xuegang Liu, “Spent Nuclear Fuel Management in China,” Nautilus Institute for Security and Sustainability, August 5, 2014, https://nautilus.org/napsnet/napsnet-special-reports/spent-nuclear-fuel-management-in-china/.

¹¹⁰ Author communication with Russian nuclear executive, May 2016.

¹¹¹ Yun Zhao, “China’s Current Spent Fuel Management.”

¹¹² Ibid.

¹¹³ Xuegang Liu, “Spent Nuclear Fuel Management in China.”

¹¹⁴ Author communications with Chinese and foreign government officials, 2015 and 2016.

¹¹⁵ Robert Forrest and Chaim Braun, “Managing China’s Spent Fuel: A Model Framework for Interim Storage,” Nonproliferation Review 24, nos. 1 and 2 (2017): 38.

¹¹⁶ Author communications with Chinese nuclear executives and experts, 2015 and 2016, and with foreign government officials, 2015.

¹¹⁷ Yun Zhao, “China’s Current Spent Fuel Management,” 15.

¹¹⁸ T. A. Todd, “Development of Closed Nuclear Fuel Cycles in the United States,” in Reprocessing and Recycling of Spent Nuclear Fuel, ed. Taylor, 524.

¹¹⁹ Harold Feiveson et al., eds., Managing Spent Fuel in Nuclear Power Reactors (Princeton: International Panel on Fissile Materials, September 2011), http://fissilematerials.org/library/rr10.pdf, 3.

¹²⁰ “The Spent Fuel Storage and Transportation of China—Challenges and  Recommenations,” China General Nuclear Power Corporation, November 2015, http://china.areva.com/home/liblocal/docs/China%20Offer/2nd%20Back%20End%20Seminar%20in%20Beijing%202015/(丁怀博_En).pdf. See also: Forrest and Braun, “Managing China’s Spent Fuel,” 43. They calculate that a delay in reprocessing until 2035 would compel China to set up an additional 600 MTHM in interim spent fuel storage capacity.

¹²¹ “The Spent Fuel Storage and Transportation of China,” China General Nuclear Power Corporation.

¹²²  Feiveson et al., Managing Spent Fuel in Nuclear Power Reactors, 127.

¹²³ Ye Guoan and Yan Taihong, “Development of Closed Nuclear Fuel Cycles in China,” 532.

¹²⁴ M. Salvatores, “Global Scenarios for Nuclear Energy: The Role of Fast Reactors” ( IAEA Education and Training Seminar/Workshop on Fast Reactor Technology, CNEA Bariloche, Argentina October 1–5, 2012) IAEA,    https://www.iaea.org/NuclearPower/Downloadable/Meetings/2012/2012-10-01-10-05-WS-NPTD/1.1_Salvatores_global_scenarios.pdf.

¹²⁵ V. Romanello et al., “Sustainable Nuclear Fuel Cycles and World Regional Issues,” Sustainability 4 (2012): 1,214–38.

¹²⁶ Author communication with Chinese nuclear laboratory official, Beijing, 2010

¹²⁷ Romanello et al., “Sustainable Nuclear Fuel Cycles,” 1,225.

¹²⁸ This paper suggests that by 2020 the total civilian spent fuel reprocessed worldwide might be about 120,000 MT out of total civilian spent fuel arisings of about 450,000 MT. See “Storage and Disposal of Spent Fuel and High Level Radioactive Waste,” IAEA, 2006, https://www.iaea.org/About/Policy/GC/GC50/GC50InfDocuments/English/gc50inf-3-att5_en.pdf.

¹²⁹ Kenneth L. Nash and Mikael Nilsson, “Introduction to the Reprocessing and Recycling of Spent Nuclear Fuels,” in Reprocessing and Recycling of Spent Nuclear Fuel, ed. Taylor, 12–13.

¹³⁰ Author communication with Chinese nuclear laboratory official, Beijing, 2015.

¹³¹ Francois Drain et al., “COEX Process: Cross-Breeding Between Innovation and Industrial Experience,” Waste Management Symposia, 2008,  http://www.wmsym.org/archives/2008/pdfs/8220.pdf.

¹³² Technical literature mentions as potential challenges the reduction of uranium and plutonium to desired oxidation states, quality assurance in pellet production, and possible criticality management issues; see Mark J. Sarsfield, “The Coprecipitation and Conversion of Mixed Actinide Oxalates for Aqueous-Based Reprocessing of Spent Nuclear Fuels,” in Reprocessing and Recycling of Spent Nuclear Fuel, ed. Taylor, 343.

¹³³ Nuclear Energy Agency (NEA) and Organization for Economic Cooperation and Development (OECD), Trends Toward Sustainability in the Nuclear Fuel Cycle (Paris: OECD, 2011), 89.

¹³⁴ NEA and OECD, Very High Burn-ups in Light Water Reactors (Paris: OECD, 2006), 17, 19-21.

¹³⁵ NEA and OECD, Trends toward Sustainability, 90.

¹³⁶ “The Spent Fuel Storage and Transportation of China,” China General Nuclear Power Corporation.

¹³⁸ Ye Guoan and Yan Taihong, “Development of Closed Nuclear Fuel Cycles in China,” 532.

¹³⁹ Giuseppe Modolo et al., “Minor Actinide Separations in the Reprocessing of Spent Nuclear Fuels,” in Reprocessing and Recycling of Spent Nuclear Fuel, ed. Taylor, 247.

¹⁴⁰ Difficulties arise because of the neutron poisoning characteristics of some lanthanides, the relatively large lanthanide content in spent fuel (50 times greater than americium/curium) and the segregation of lanthanides into separate phases during fuel fabrication; see Jean-Paul Glatz et al., “Key Challenges in Advanced Reprocessing of Spent Nuclear Fuels,” in Reprocessing and Recycling of Spent Nuclear Fuel, ed. Taylor, 53.

¹⁴¹ L. G. Williams, “Safety and Security Issues in the Reprocessing and Recycling of Spent Nuclear Fuels for Advanced Fuel Cycles,” in Reprocessing and Recycling of Spent Nuclear Fuel, ed. Taylor, 88. 

¹⁴² G. Modolo, “Minor Actinide Seperations,” 278.

¹⁴³ Bruce A. Moyer et al., “Minor Actinide Separation in the Reprocessing of Spent Nuclear Fuels: Recent Advances in the United States,” in Reprocessing and Recycling of Spent Nuclear Fuel, ed. Taylor, 308.

¹⁴⁴ NEA and OECD, Trends Toward Sustainability, 112. 

¹⁴⁵   Liu Fang et al., “Methyl-hydrazine Deoxidize Tc(VII) in Nitric Acid in Presence of U(VI) and Behavior of Technetium in the U/Pu Splitting Stage of APOR Process,” Energy Procedia 39 (2013): http://ac.els-cdn.com/S187661021301309X/1-s2.0-S187661021301309X-main.pdf?_tid=b9b4cd44-c545-11e6-a1e5-00000aacb362&acdnat=1482081574_1c7e0f3553d487ca01beb41e7cfa5c74, 358–64 .

¹⁴⁶ Ye Guoan, He Hui, Lin Rushan, and Zhu Wenbin, “R&D Activities on Actinide Separation in China,” Procedia Chemistry 7 (2012): http://ac.els-cdn.com/S1876619612001106/1-s2.0-S1876619612001106-main.pdf?_tid=8b13b252-c3ce-11e6-8204-00000aacb35d&acdnat=1481920434_eb2670113ef6baf101b176b209a16aec, 215–21.  

¹⁴⁷Ye Guoan and Yan Taihong, “Development of Closed Nuclear Fuel Cycles in China,” 544.

¹⁴⁸ Ibid., 542–4; Song C. L. et al., “Partitioning of TRU Elements From Chinese HLW,” China Nuclear Science and Technology Report (Beijing: Atomic Energy Press, 1994).

¹⁴⁹ “Part II: Technical Analysis and Summary,” NEA and OECD, https://www.oecd-nea.org/trw/docs/neastatus99/Part2.pdf, 123.

¹⁵⁰ R. G. Lewin, M.T. Harrison, “International Developments in Electrorefining Technologies for Pyrochemical Processing of Spent Nuclear Fuels,” in Reprocessing and Recycling of Spent Nuclear Fuel, ed. Taylor, 375.

¹⁵¹ C. Channy Wong et al., “An Overview of the US-China Cooperation on Advanced Fuel Cycle Research,” Eighth International Topical Meeting on Nuclear Thermo-Hydraulics, Operation, and Safety, Shanghai, October 10-14, 2010    http://www.osti.gov/scitech/servlets/purl/1123279.

¹⁵² Author communication with Chinese nuclear laboratory official, Beijing, 2010.

¹⁵³ Ye Guoan and Yan Taihong, “Development of Closed Nuclear Fuel Cycles in China,” 544.

¹⁵⁴ Author communications with Chinese industry executives in September and November 2017

¹⁵⁵ “Development Strategy for Nuclear Fuel Cycle Technology,” Bulletin of the Chinese Academy of Sciences 29, no. 3 (2015): 167–9,   http://english.cas.cn/bcas/2015_3/201509/P020150930641510858892.pdf.

¹⁵⁶ In October 2010, China and Belgium concluded a bilateral nuclear cooperation agreement; it included a memorandum for Belgian industry to provide its MOX fuel know-how to China and essentially replicate an existing Belgian MOX fuel production plant to produce 35 MT/y of MOX fuel in China. China sought Belgian assistance because that country had been a leader in the development in MOX fuel technology for several decades but in 2005 decided to shut its MOX industry down. China intended to build the Belgian-sourced MOX fuel plant at its military Plant 404 site in Jiuquan, adjacent to the pilot spent fuel reprocessing plant. Sometime in 2012, the joint venture project collapsed. According to European nuclear fuel industry executives in 2017, Belgium—echoing French concerns about siting an Areva-supplied reprocessing plant in China—would not agree to construct the MOX facility at the Jiuquan military site as had been proposed by China. The demise of that project left China with a laboratory-sized installation at Jiuquan, based on its own know-how and equipment, to produce up to 500 kilograms of MOX fuel per year. That operation, according to CNNC, would produce enough MOX to begin loading this fuel into the CEFR by 2015. See also “ Russia to Supply HEU Fuel for Fast Neutron Reactor in China,” IPFM (blog), International Panel on Fissile Materials, October 20, 2013, http://fissilematerials.org/blog/2013/10/russia_to_supply_heu_fuel_1.html.

¹⁵⁷ Lu Daogang and Xu Mi, “Progress in the Design and Construction of China Experimental Fast Reactor” (GENES4/ANP2003, Kyoto, September 15–19, 2003), Brazil Nuclear and Energy Research Institute, https://www.ipen.br/biblioteca/cd/genes4/2003/papers/1231-final.pdf.

¹⁵⁸ Chinese experts told the author that, between 2011 and 2017, a small amount of test MOX fuel had been inserted into the CEFR and that, in early 2017, there was no MOX fuel in the core of the reactor.

¹⁵⁹ Sources told the author that the CEFR will in the future be fueled with 81 fuel assemblies in the core, each containing about 140 kg of MOX fuel. Statements from Chinese sources varied considerably concerning the percentage of plutonium in the MOX fuel for the CEFR.

¹⁶⁰ Zhang, “Fast Reactor Development Strategy in China.”

¹⁶¹ Wong et al., “An Overview of the US-China Cooperation on Advanced Fuel Cycle Research.”

¹⁶² R. Natarajan, “Reprocessing of Spent Fast Reactor Nuclear Fuels,” in Reprocessing and Recycling of Spent Nuclear Fuel, ed. Taylor, 222.

¹⁶³ Chris J. Maher, “Current Headend Technologies and Future Developments in the Reprocessing of Spent Nuclear Fuels,” in Reprocessing and Recycling of Spent Nuclear Fuel, ed. Taylor, 103–5.

¹⁶⁴ Natarajan, “Reprocessing of Spent Fast Reactor Nuclear Fuels,” 229, 237.

¹⁶⁵ Zhang, “Fast Reactor Development Strategy in China.”

¹⁶⁶ IAEA, Management of Reprocessed Uranium: Current Status and Future Prospects (Vienna: IAEA, February, 2007), http://www-pub.iaea.org/MTCD/publications/PDF/te_1529_web.pdf; IAEA, Use of Reprocessed Uranium: Proceedings of a Technical Committee Meeting Held in Vienna, August 2007  (Vienna: IAEA, August 2007), http://www-pub.iaea.org/MTCD/publications/PDF/TE_1630_CD/PDF/IAEA-TECDOC-1630.pdf.

¹⁶⁷ IAEA, Management of Reprocessed Uranium, 86.

¹⁶⁸ Ibid., 55.

¹⁶⁹ “SNC-Lavalin Signs and Agreement in Principle for a Joint Venture With  CNNC and Shanghai Electric Company,” press release, SNC-Lavalin, September 22, 2016,   http://www.snclavalin.com/en/news/2016/snc-lavalin-signs-agreement-principle-joint-venture-china-national-nuclear-corporation-shanghai-electric-company.

¹⁷⁰ Author communication with Chinese nuclear experts, Beijing, 2016.

¹⁷¹ Author communication with Canadian nuclear officials, Vienna and London, January and March, 2016.

¹⁷² Wang Ju et al., “Deep Geological Disposal of High Level Radioactive Wastes in China,” Chinese Journal of Rock Mechanics and Engineering 25, no. 4 (April 2006): 649–58.

¹⁷³ Liu Chunli, “Big Progress at High Level Radioactive Wastes Disposal in China” (WM 2014 Conference, Phoenix, March 2–6, 2014), Waste Management Symposia,  http://www.wmsym.org/archives/2014/papers/14064.pdf.

¹⁷⁴ Ibid.

¹⁷⁵ Author communications with Chinese nuclear experts, 2015.

¹⁷⁶ Author communication with Chinese nuclear experts, Xiamen, 2015.

¹⁷⁸ Ibid.

¹⁷⁹ J. Uhlir et al., “Development of Pyroprocessing Technology for Thorium-Fueled MSR” (presentation before the International Conference on Advances in Nuclear Power Plants, Chicago, July 2012).

¹⁸⁰ Author communication with a Chinese nuclear expert, 2015.

¹⁸¹ Chen Heshing, Large Research Infrastructures Development in China, (Beijing: China Academy of Sciences Press, 2011), 38.

¹⁸² Ibid.

¹⁸³ C. F. Yu, “CGN’s Search for Back-End Alternatives,” Nuclear Intelligence Weekly (NIW), November 28, 2016, 4–5.

¹⁸⁴ Li Zhihui et al., “Physics Designs of an Accelerator for an Accelerator-Driven Sub-critical System,” Physics Review 16 (2013):   http://journals.aps.org/prab/pdf/10.1103/PhysRevSTAB.16.080101.

¹⁸⁵ “Accelerator-Driven Nuclear Energy,” World Nuclear Association, April 2017   http://www.world-nuclear.org/information-library/current-and-future-generation/accelerator-driven-nuclear-energy.aspx.

¹⁸⁶ Thorium Report Committee, Thorium as an Energy Source (Oslo: Research Council of Norway/Ministry of Petroleum and Energy, 2008), 1–6, 106–8,  https://www.regjeringen.no/globalassets/upload/OED/Rapporter/ThoriumReport2008.pdf.

¹⁸⁷ Lee McIntire, “Taking the Next Steps for TWR Prototype Development,” TerraPower, September 23, 2015, http://terrapower.com/news/taking-the-next-steps-for-twr-prototype-development.

¹⁸⁸ Author communication with Chinese nuclear experts, 2015 and 2016.

¹⁸⁹ Tyler Ellis et al., “Travelling Wave Reactors” (ICAAP 2010 Proceedings, San Diego, June 13–17, 2010), Stanford University, http://large.stanford.edu/courses/2016/ph241/yun1/docs/10189.pdf.

¹⁹⁰ John Gilleland et al., “The Travelling Wave Reactor: Design and Development,” Engineering 2, no. 1 (March 2016): 88–96   http://ac.els-cdn.com/S2095809916301527/1-s2.0-S2095809916301527-main.pdf?_tid=d9a07d98-842a-11e7-9693-00000aacb35e&acdnat=1503070703_1d9bcc79bec246b7c63e547715388548; whether the reactor can operate using pyroprocessed spent fuel will depend on the reactor’s tolerance of highly radioactive fission products present in the fuel (author communication with U.S. nuclear laboratory expert, August 2017).

¹⁹¹ Unofficial media have speculated that the TerraPower reactor would be built at the Xiapu site in Fujian Province: “Kernkraftwerk Xiapu” [in German], Nucleopedia, last modified February 25, 2018, http://de.nucleopedia.org/wiki/Kernkraftwerk_Xiapu.

¹⁹² Author communication with a Chinese nuclear R&D official, March 2017.

¹⁹³“China Sets Out Nuclear Plans for 2017,” World Nuclear News, March 2, 2017, http://www.world-nuclear-news.org/NP-China-sets-out-nuclear-plans-for-2017-0203174.html.

¹⁹⁴ Xu Bin, “CNNC’s ACP 100 SMR: Technical Features and Progress in China” (13^th INPRO Dialogue Forum on Legal and Institutional Issues in the Global Deployment of Small Modular Reactors, IAEA, October 18–21, 2016), IAEA, https://www.iaea.org/INPRO/13th_Dialogue_Forum/011_CNNC_s_ACP100_SMR-Technique_Features_and_Progress_in_China.pdf.

¹⁹⁵ Lewis and Xue, China Builds the Bomb, 199–201.

¹⁹⁶ “China’s Ambitious Path to Fusion Power,” 21^st Century Science and Technology (Spring 2011): 47–56, http://www.21stcenturysciencetech.com/Articles_2011/Spring-2011/China_Fusion.pdf.

¹⁹⁷ Wan Yuanxi et al., “Energy Demand and Possible Strategy of Fusion Research in China” (Proceedings of Second IAEA Technical Meeting on First Generation Fission Power Plants: Design and Technology), IAEA, http://www-pub.iaea.org/MTCD/publications/PDF/P_1356_CD_web/Papers/Wan%20Paper%20EP%20I-4.pdf.

¹⁹⁸ Chen, Large Research Infrastructures Development in China, 40.

¹⁹⁹ Wan, “Energy Demand and Possible Strategy of Fusion Research in China.”

²⁰⁰ He X. T. “Advances in the National Inertial Fusion Program of China,” EPJ Web of Conferences 59 (2013): http://www.epj-conferences.org/articles/epjconf/pdf/2013/20/epjconf_ifsa2011_01009.pdf.

The future of nuclear power is uncertain. The structure of many countries’ electricity sectors initially favored investments in nuclear power but has evolved to discourage them. Given these current conditions, it is not certain that the world’s nuclear industry will be economically viable through the middle of this century. More than any other power-generation technology option, nuclear power requires a long-term commitment from governments, investors, and publics for it to be used safely and in a sustainable manner. In part to recover rising capital costs, future nuclear power plants will be designed to have operating lifetimes of sixty years or more, and expenses related to planning, licensing, decommissioning, and waste management will extend the life cycle of a nuclear project to a century or even longer.

In general, greater uncertainty about the future of nuclear power implies greater perception of risk. This may deter governments and industries from investing in more advanced and expensive nuclear technologies, particularly those requiring long lead times for R&D and industrial demonstration, and especially if decisionmakers are not confident that these investments will result in commercially exploitable assets based on sound technology that can be further developed.

When most of the world’s nuclear power plants were built, governments considered electricity supply, transmission, and distribution to be a natural monopoly, due to the lack of competition resulting from fixed costs to new entrants. They viewed the high capital investment costs prevailing in the electric power sector as an insurmountable barrier that would prevent new entrants from competing with an established single provider that would enjoy a lower average cost and economies of scale for the production of a public good. Companies in the business of producing electricity invested in nuclear power because the cost would be borne by consumers and reflected in the rate base.

Since the 1990s, many governments have deregulated their electricity sectors to encourage competition. This sometimes implied that the price for nuclear power must be increased compared to other sources for producers to make a profit, and, in most markets, it meant that new nuclear power investments would be more expensive than alternative technologies. In addition, some governments have introduced policy measures that subsidize the development and deployment of selected non-nuclear technologies to generate electricity.

China quickly and impressively assimilated proven foreign know-how to build initial LWRs and then replicate them under tight construction schedules and with few delays. But how quickly will China move forward this century with the advanced nuclear technologies discussed in the last chapter? The realization of the CEFR pilot project required nearly twenty-five years. On the basis of their previous experience, experts who were involved in fast reactor programs in Europe, Japan, and Russia cautioned during workshops in May 2015 and June 2016 that China should not expect to design, build, and operate a commercial demonstration fast reactor without significant delays.²⁰¹ More broadly, these experts underscored that current multilateral international efforts in support of fast reactor development are beset with the formidable challenge of transitioning from fast reactor R&D programs to deploying commercially viable nuclear systems.²⁰²

Given this background, it is important for policymakers and investors alike to consider whether the economic and electricity policy environments in China will indefinitely favor nuclear power and, beyond that, support efforts to deploy more advanced nuclear systems with a different risk profile that may require greater financial and political commitment.

Nuclear Economics in China Before 2005

Beginning in the late 1970s, China planned to introduce nuclear electricity to its mix of power sources having concluded that the cost would be justified by the value of the investment. This conclusion was backed by a number of Chinese studies, which argued that nuclear power would be cost-competitive with other sources.²⁰³ From the beginning of China’s nuclear power program, the central government—like governments in other countries that had decided in favor of nuclear power a decade or two before—firmly controlled its electricity sector and was responsible for making all investment and most pricing decisions.

A few skeptics argued then that the high capital cost of nuclear power plants would deter China from investing in renewable energy sources and that nuclear power would not compete with the cheap and available coal resources that supplied about three-quarters of China’s power.²⁰⁴ But the central government’s decision to build a small number of nuclear power plants was based on political, energy security, and technology policy rationales, largely independent of cost considerations, that emerged out of China’s post–Cultural Revolution reform process.

As Deng Xiaoping’s economic modernization led to higher growth, Beijing began reforming China’s electricity sector to incentivize greater power production, including making allowance for both foreign capital financing and broader Chinese investment in nuclear power projects. During the 1980s and 1990s, whether China could afford nuclear power mattered less because most of the nuclear power plants were built under contracts concluded for equipment and services provided by foreign vendor companies. The financing for these projects was underwritten by foreign governments on behalf of their industries. Indeed, between 1980 and 1996, the Chinese state’s contribution to the financing of power sector investments fell from 60 percent to 0.2 percent, while foreign contributions increased from zero to 12 percent.²⁰⁵ Diversification of investment and decentralization of production was encouraged by spectacular economic growth along China’s seaboard—particularly in Guangdong Province, where restive political and industrial leaders were keen to challenge Beijing’s claim to sole decisionmaking authority.²⁰⁶

Economic considerations about nuclear power arose more distinctly during the 2000s, after China’s leaders decided to dramatically accelerate the pace of nuclear power plant investment, in the shadow of coal supply bottlenecks and as demand for electricity continued to increase. Coal shortfalls were accompanied by an increase in coal prices and Chinese coal imports that the government interpreted as a long-term future trend, leading planners to predict that nuclear power would by itself become comparatively more competitive against coal in the future.²⁰⁷ As coal prices and imports rose, state-owned power companies piled up debt and ran losses, and they successfully lobbied the government to permit them to invest in nuclear power. Beijing agreed. In the aftermath of the central government’s 2005 decision to speed up nuclear power development, a nuclear gold rush occurred: SOEs carved out of the former state energy ministry as part of ongoing electricity sector reform placed their bets on government planners’ long-term projections of electricity demand growth, and they formed partnerships with local and provincial governments to propose scores of nuclear power plant projects all over China.²⁰⁸

Chinese Government Assistance for Nuclear Power

The nuclear power plants China built over the ensuing decade turned out to be very profitable. During the period 2002 through 2012, China’s two nuclear power generators, CGN and CNNC, recorded annual returns against assets of 7.1 percent, more than double the levels attained during those years by thermal power plant companies.²⁰⁹ The concerns of these firms’ government shareholders about project risk were assuaged by expectations that nuclear projects would hold their own against coal and renewables because they would be located close to their markets: densely populated seaboard areas that were experiencing high economic growth. Provincial governments’ political resistance against transboundary power sales, and the daunting task facing China’s grid companies to move electricity across long distances, provided still more insurance for nuclear investment projects located along China’s eastern coastline.

Then and now, the profitability of Chinese nuclear investments has benefited from the support of provincial and central government leaders. This assistance is provided in a number of ways, most significant of which are:

Access to Information and Decisionmakers

The number of corporate entities allowed to invest in the nuclear power sector is strictly limited; all firms are owned and controlled by the state. The Communist Party, the most powerful organization in China, is involved in all top-level personnel decisions. Senior SOE managers in the power sector are promoted into central and provincial governments, where they “retain their links to the companies and provide insights from and arguments favorable to the companies.”²¹⁰ Nearly all high-ranking government officials are members of the Communist Party and subject to its discipline. SOEs have a Communist Party hierarchy parallel to the management hierarchy, in which the party secretary may have more authority than senior managers.²¹¹ Management’s access to the Communist Party is influential and can facilitate support from local and provincial industry and governments, including for pre-authorization infrastructural work to support construction of projects in advance of formal approval by the State Council and other regulators. Many or even most of China’s proposed nuclear construction projects may have benefitted in this way.²¹² More generally, lack of accountability and transparency in decisionmaking on energy-related issues has, for decades and until recently, been fostered by the relatively underdeveloped status of China’s legal system and civil society.²¹³ This has meant, in practice, that price setting and dispatching policies are subject to ad hoc, crisis-management decisionmaking, where opaque political influence and personal relationships may strongly factor.²¹⁴ That said, it is also true that since the late 1990s, corporatization of China’s electricity industry—including its nuclear SOEs—has to a certain extent challenged the power of the Communist Party and the Chinese state to direct firms to make nuclear asset management and investment decisions. To a greater degree than before, leaders of China’s nuclear SOEs in recent years have encouraged the development of a management culture that distinguishes the interests of the companies from those of the Chinese state and the Communist Party.

Financial Subsidies

Power-generating SOEs have not been obligated until recently to pay dividends to their government shareholders. So-called policy banks, such as the China Development Bank, have provided these companies, above all CNNC, loans at favorable, state-subsidized rates.²¹⁵ More generally, the SOEs benefit from controls on deposit interest rates that permit state-owned lenders to provide nuclear-project financing at selected low discount rates that give nuclear power a clear and very large financing cost advantage.²¹⁶

Favorable Price Setting

Perhaps the most effective potential financial perk that the Chinese state affords nuclear power is the arrangement of favorable price conditions to deliver nuclear-generated electricity to the grid. China’s central planning agency, NDRC, controls the price at which power producers sell their output. It sets a different feed-in tariff for each power source: nuclear, solar, wind, hydro, and coal. For as long as the central government has taken this approach, the guaranteed tariff paid to producers for nuclear power—0.43 renminbi per kilowatt-hour (RMB/kWh) in 2016 and 2017—has been higher than the rate for either coal-fired or hydroelectric power, in part reflecting higher capital costs for nuclear plants.²¹⁷ How important to the welfare of China’s nuclear sector is this remunerative tariff? “We watch this carefully,” said one Chinese nuclear industry executive in 2015. “If the government were to take this away from us, the future of our business would be in a lot of trouble.”²¹⁸

Electricity Sector Reform and Nuclear Power

Electricity reform in China began modestly nearly fifty years ago but it has been ongoing and it will likely continue. The more profound and effective China’s electricity sector reform is, the more economics and cost considerations will factor in future nuclear policy decisionmaking.

Electricity Market Reform

Following government decentralization initiatives in the 1980s and 1990s, Beijing began commercializing and unbundling the power sector. Many of the steps China took during the early 2000s looked familiar to government officials and company executives who were deregulating power systems in Western countries.

China’s State Planning Commission, the central government’s mammoth planning agency, was rebranded as NDRC in 2003. It established a central government Energy Bureau, which later was upgraded to a vice-ministerial National Energy Administration, or NEA. The state created a Ministry of Environmental Protection (MEP), and then set up the State-Owned Asset Supervision and Administration Commission (SASAC), which assumed the role of central government shareholder for power sector SOEs. The central government also made an attempt to set up a power industry regulatory commission.

In parallel, China’s leadership took actions to expose its electric power system to market forces. This process began in 2002, when Beijing unbundled the gigantic China State Power Corporation (SPC), which owned most of China’s transmission and distribution infrastructure and a large share of China’s generation capacity. In the wake of the breakup, two grid-management companies were set up that would be independent of five new power-generating SOEs that were also hived off of SPC. These five companies acquired nearly half of China’s electric power generating capacity within five years.²¹⁹ This drive was fueled by the 2005 central government decision to accelerate nuclear power plant construction discussed above. Power-generating SOEs successfully pressured the government to allow them to raise capital in the bond market to finance their forthcoming nuclear capacity investments in line with the central government’s now-higher reactor-building targets.

Power generators were especially inclined to invest in nuclear power plants for two reasons: 1) rising prices for domestic coal, which—beginning in the mid-2000s, in the wake of coal sector reforms—were tracking international market prices; and 2) the absence of an effective mechanism that linked the price of coal to the on-grid price of thermal power.²²⁰ In this situation, it was only a matter of time before industry firms began pressing the government for a more fundamental reform of its price-setting system. Today, this reform is still at an early stage and, in the view of Chinese market advocates, it has far to go. Whereas until the 2000s China’s nuclear sector was too small to influence the state’s price setting, that situation changed as more and more reactors were built. Since 2005, NDRC has assured that nuclear power generators benefit from higher tariffs for the power they sell to the grid.

In the coming years under Xi Jinping, two important power reform agenda items may profoundly affect the nuclear sector: Beijing’s long term ambition to introduce market mechanisms, and its even-more-ambitious effort to decarbonize China’s electricity generation system. Both these interests strongly figured in Xi’s 2014 proclamation of a “revolution in energy production and consumption” that would cut back waste, incentivize investment in non-fossil energy sources, enlarge the role of market forces, and reform energy sector regulations and governance.²²¹ The future of NDRC’s tariff setting, including for nuclear power, is at the heart of both initiatives.

Environmental Policy-Driven Measures and Growth

As evidenced, deployment of nuclear power generation technology in China was informed from the outset by the need to diversify away from coal. China’s resolve to decarbonize its power sector has intensified in response to certainty among experts worldwide that atmospheric carbon dioxide emissions must be dramatically reduced to avoid adverse global climate change, but, until now, China’s need to reduce particulate air pollution has been the primary environmental policy driver for nuclear power.

In 2009, China announced that it aimed by 2020 to reduce CO₂ emissions intensity (average emissions per unit of gross domestic product) by 40–45 percent below the 2005 level and to increase the share of non-fossil fuels in primary energy production by 2020 to 15 percent.²²² In 2016, China ratified the agreement forged at the United Nations climate change conference in Paris on carbon reductions that would limit anticipated global temperature increases. In doing this, China extended the horizon of its climate mitigation commitments beyond 2020 to 2030, and agreed to reduce its CO₂ emissions intensity by 60–65 percent and increase the non-fossil share of energy production to 20 percent, implying a peaking of China’s CO₂ emissions by 2030. These goals were also reflected in climate policy targets included in China’s Thirteenth Five-Year Plan (2016–2020).²²³ Under five-year plans covering 2011 through 2020, China has been aggressively expanding investment in power production capacity from wind, solar, and nuclear sources. If goals are met, China’s capacity for wind-powered power generation will have increased from 31 GWe in 2010 to 200 GWe in 2020; solar-powered capacity will have increased from about 1 GWe in 2010 to 70 GWe in 2020; and nuclear power capacity will increase to 58 GWe in 2020 with an additional 30 GWe under construction.

What NDRC’s planning targets imply for the period after 2020 is not spelled out, and this is subject to conjecture and wishful thinking by participants and observers who favor (or not) the deployment of specific power generation technologies. The amount of nuclear power that will be allocated in future five-year plans will depend, inter alia, upon: expectations for economic growth, government carbon-reduction goals and commitments, and technology development including for electricity storage and carbon sequestration as well as power generation. It will also depend on the architecture of the power system—in particular, whether Chinese power demand will indefinitely include a substantial base load that would be served by nuclear power plants, as has been the case so far, and how deeply ultra-high-voltage transmission infrastructure in the future penetrates the Chinese power grid.

Especially prior to the Fukushima accident, some quasi-official Chinese government agency estimates for nuclear power installed capacity in 2050 were as high as 400–500 GWe. These estimates corresponded to numbers used by scientists at the Lawrence Berkeley National Laboratory (LBNL) in the United States beginning during the late 2000s, in cooperation with researchers affiliated with NDRC, which used Chinese data to model future projected Chinese electricity demand and greenhouse gas emissions.²²⁴

Barring unforeseen developments, Chinese government planners and research organizations are not expecting t