China exploits western caution to take nuclear initiative

• 12 years ago (2012-04-10)
• Junior Isles

Asia 848 Europe 1061 Middle East 311 Nuclear 640

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China has moved ahead of its rivals competing to build a new nuclear power station on Turkey’s Black Sea coast, underlining the declining ambitions of many developed nations' nuclear industries.

Unlike other nations, China is thought not to be looking for government guarantees for the project and will supply its own financing, setting it apart from previous bidders such as South Korea, according to a Turkish energy official.

“They don’t have a financing problem. If they agree they will build it,” said the official.

The Fukushima disaster led directly to Tokyo Electric Power’s withdrawal of their bid for the project, although TEPCO’s compatriot Toshiba is still preparing a bid.

Recep Tayyip Erdogan, Turkey’s prime minister, is also visiting Beijing to negotiate the deal, amongst other matters.

Mr Erdogan is expected to sign an agreement on peaceful nuclear co-operation, a necessary precondition for progress on any deal. China currently only has nuclear co-operation agreements with Mongolia, Niger and Belarus for the express purpose of supplying uranium.

Post-Fukushima, nuclear programmes in developed countries such as Germany and Japan have been slowed or shut down, leaving China in prime position to compete for new contracts. China is the world’s biggest builder of new nuclear reactors, though for now they are largely domestic – only Pakistan has a Chinese- built nuclear plant.

China National Nuclear Corporation and China Guangdong Nuclear Power Corporation are two Chinese power companies with international ambitions of the nuclear variety.

“China does want to go out and they are going to be aggressive in providing the financing so that some countries accept the offer,” says Guo Shou, a power analyst at Barclays in Hong Kong. “The problem right now is the acceptance of the Chinese technology.”

Chinese companies have historically suffered in the bidding process due to contractual prohibitions preventing them from exporting the most modern reactors being built in China as foreign companies such as Westinghouse and Areva own the patents for those reactor designs.

Many commentators agree that China’s indigenous reactor technology, which is available for export, is rapidly catching up with western technology. The latest “third generation” model designs are expected to be finalised by 2013, though they may not be export ready for several more.