China General Nuclear Power expands overseas plant construction business
Plans for development of nuclear plants around the world, and uranium production to start this year
China General Nuclear Power Corp (CGN), whose pipeline of reactors under construction is the world’s largest, is eyeing opportunities to develop nuclear plants in 13 nations in Southeast Asia, Eastern Europe and Africa, as its seeks to bump its revenue from abroad to 15 per cent by 2020.
The Shenzhen-based firm, the largest of the nation’s three state-owned nuclear power plant builders, is seeking to export reactors it has learned to build over the past three decades through the import of foreign technology, on which it has made innovations and claimed its own intellectual property.
“We are still at a start-up stage in the overseas nuclear business, we hope to ramp up its contribution,” Yang Maochun, CGN’s deputy general manager of international nuclear power business development told the South China Morning Post.
He said there are around two dozen nations that have plans to build nuclear reactors in the coming decades and need overseas help to do so. CGN has been forging business relationships with 13 of them.
“We aim to have a minimum of 15 per cent of our revenue coming from overseas by 2020, to be derived from nuclear power plant investment and engineering services, uranium mining and trading, besides non-nuclear clean energy generation,” Yang said.
Having set up an overseas business development team in 2009, he said the firm sourced some 10 per cent of its total sales from overseas in 2014, mainly from uranium trading and mining of the fuel in Central Asia’s Kazakhstan, wind and solar energy projects in Singapore, Australia, United States and Europe.
It expects to start uranium production in southwest Africa’s Namibia this year.
He said CGN had drawn up a three-phase approach to internalisation of its business, by becoming a sub-contractor for foreign reactor developers’ overseas projects between 2009 and 2014, before gaining its own capability to handle large portions of a project overseas..
Since China first issued its nuclear power development plan almost half a century ago, it commissioned its first indigenously-designed and built nuclear reactor south of Shanghai in 1991, and started generating power at its first reactor using French technology northeast of Hong Kong in 1994.
While expanding its reactor fleet with both domestic and French technology, it has also imported Canadian and Russian reactors, before moving to introduce so-called third-generation (3G) technologies developed by American and French firms.
While touted as having simpler designs that reduce capital costs and which are easier to build than older reactors, both technologies suffered construction delays due to technical challenges.
Meanwhile, CGN has upgraded the French 3G technology, while rival China National Nuclear Corp (CNNC) has upgraded the US technology. Both came up with their own versions of 3G products late 2011.
To avoid direct competition overseas, regulator National Energy Administration ordered the duo to merge their designs into one product for export.
They have also set up an equal joint venture in December to market Hualong One overseas.
Last October, French reactor developer EDF signed a preliminarily agreement for CGN, CNNC and other Chinese funds to invest a combined 33.5 per cent stake in the proposed £18 billion (HK$201.6 billion) Hinkley Point nuclear plant in southwest England, using the French 3G technology.
It was also agreed that the Chinese companies would be offered opportunities to participate in the construction of two more nuclear projects in southeast England, which may allow them to export their Hualong One reactors in at least one of the projects.
Last September, CGN signed a memorandum of understanding with the government of Kenya in east Africa on the construction of a Hualong One project, as part of its effort to follow Beijing’s “One Belt, One Road” overseas development strategy.
In late December CGN inked an agreement with Thai utility Ratch to invest in the second phase development of CGN’s Hualong One nuclear project in Guangxi Zhuang autonomous region, which CGN hopes would pave way for a future Hualong One project in Thailand.
In late 2014, CGN won a bid to build a nuclear project in Romania using Canadian reactor technology.