beyondbrics

When Beijing did a pirouette on its nuclear programme Wednesday, the world sat up: China is the world’s biggest builder of new nuclear reactors, and the global nuclear industry has to a large extent nailed its future to the bet that China will continue down its path of nuclear expansion.

The State Council’s decision to suspend new reactor approvals until a new set of safety rules is in place therefore came as a bit of a shock to the system.

But behind the scenes, those in the nuclear industry in China say that Beijing has been trying to slow down the stream of nuclear projects for some time.

Proposals for nuclear power plants typically originate from provincial level officials, who see the plants as a way for them to boost their tax base and show support for the government’s clean energy vision. These are usually weeded out by successively more powerful ministries, with the ultimate decisions on whether or not to build a new plant coming from the very highest levels of government in Beijing.

Even before events in Japan, some energy officials in Beijing were warning that China was moving into nuclear power too quickly. The concerns aren’t over any technical deficiencies, but rather because China is building so much so fast that it is presenting a unique set of problems: Where to find enough experienced nuclear engineers to operate the new plants?

There is the additional question of where to buy the reactor vessels that contain the core of the reactors, given that these vessels can only be produced in a handful of mills around the world at the rate of one or two a year.

Those questions were already prompting concerns about China’s nuclear programme, both inside Beijing and around the world. One industry expert suggests that the events in Japan presented an opportunity for the State Council—which has always had to issue the final approval for nuclear plants—to re-exert control over the system. A new Atomic Energy Law, which has been rumoured in Beijing for years but never materialised, could also be expedited by the Japanese nuclear crisis.

Others in the industry say that the pace of nuclear plant construction in China might soon be back to normal. “It’s just a safety check,” shrugs one engineers at a major state-owned nuclear company. “We may improve some of our technologies as a result, but it won’t change the basic direction of growth.”

Separately, a supplier of nuclear parts says he believes the suspension will be “short term.” “I think we can still achieve our targets for nuclear energy,” he says, “But we have to see the conclusion of the crisis in Japan before we really know the impact.”

The stock market, however, is not waiting to see which way the wind will blow after the State Council’s apparent change of heart— share prices for companies like Dongfang Electric and Shanghai Electric, which both supply parts to nuclear power stations, plunged on Thursday.