With 22 nuclear power reactors under construction, China is projected to become the world’s largest nuclear energy producer within a decade — surpassing the U.S., which has only built three reactors so far in the 21st century.

This week, The Wire looks at the state of China’s nuclear industry, the country’s progress on new nuclear technologies, and whether nuclear will be part of the U.S.-China tech competition in the future.

NUCLEAR AMBITIONS

Nuclear power accounts for 5 percent of China’s total electricity generation today, with 55 reactors currently in operation. That’s still a far cry from the U.S. and France, where nuclear power accounts for 18.2 percent and 62.6 percent of electricity generation respectively, according to the International Atomic Energy Agency. 

But while American nuclear power generation has remained largely stagnant for the last decade, China’s capacity has more than tripled since 2013, a trend which allowed China to surpass France as the world’s second-largest nuclear energy producer in 2020. By 2035, nuclear power could account for 10 percent of China’s total power generation, according to S&P Global Commodity Insights.

“The fundamental driver for the Chinese nuclear program at the moment is climate and energy security,” says Kenneth Luongo, president of the Partnership for Global Security, a transnational nuclear and energy policy think tank. “They’re reading the tea leaves just like anybody else. It’s going to be a challenge to build a highly industrialized country on renewables alone, so you’re going to need some baseload power.”

Meanwhile, China’s homegrown nuclear reactor, Hualong One, has burnished the country’s credentials as a nuclear exporter, with two of these reactors now operational in Pakistan and plans for another in Argentina. For some analysts, China’s short track record as a nuclear exporter is already a positive one.

“China has the strengths that it has demonstrated with the Belt and Road Initiative as a development partner,” says Jacob Gunter, lead analyst for economic research at the Mercator Institute for China Studies. “The deals can be signed pretty quickly. There is that promise of the Chinese speed and the Chinese ease of doing business.”

Partnering with China can also lead to fewer geopolitical headwinds for developing countries compared to partnering with Russia, traditionally the world’s leading nuclear exporter, after the invasion of Ukraine, Gunter adds.

But while regulators in the U.K. and the EU have found that Hualong One meets safety standards, Western governments have balked at the prospect of Chinese nuclear technology powering their electrical grids.

“This is a sensitive technology, not just from a non-proliferation standpoint, but because of the amount of influence it gives you over a country’s energy production for a century, from the time you sign the contract until the time the reactor is decommissioned,” Luongo says.

In November 2022, the British government bought out state-owned China General Nuclear’s (CGN) stake in a major nuclear power project in southeastern England, known as Sizewell C, when it paid 679 million pounds ($839 million) for a 50 percent stake in the project. That same month, Poland selected U.S.-based Westinghouse as the technology provider to launch the country’s first-ever nuclear power project, despite discussions with CGN several years earlier on a potential partnership.

NUCLEAR-POWERED FUTURE

In June this year, China’s nuclear regulator gave an operating license to the country’s first molten-salt reactor (MSR), located in Gansu Province and under the management of the Shanghai Institute of Applied Physics. Unlike traditional nuclear reactors, which require large amounts of water to serve as a coolant, molten salt reactors are thought to offer increased fuel efficiency and less nuclear waste: MSRs can operate at full power while being refueled, and some designs are capable of consuming used fuel from other reactors, according to the U.S. Department of Energy.

Using molten salts is “a very efficient way of cooling the reactor in theory, but it’s also very challenging because if the salt interacts with oxygen, that can catch on fire, and that’s a real danger,” Luongo says. Other nuclear energy professionals have noted that the technology could offer a long-lasting power supply for warships.

A lot of these countries where these much smaller reactors could be located are going to be commercial conflict areas between the U.S. and China.

Kenneth Luongo, president of the Partnership for Global Security, a transnational nuclear and energy policy think tank

But while the pursuit of energy security is a common goal of all governments, the dual-use applications of molten salt reactors have made them a flashpoint for geopolitical rivalry. In October 2018, the U.S. government restricted exports of civil nuclear technology to China, citing the potential for such technology to be diverted for military use. Several months later, Bill Gates announced that a nuclear reactor design company he founded, TerraPower, would not proceed with a planned pilot project in China. 

MSRs are still in the testing phase in both countries, with TerraPower and its new partner, American firm Southern Company, planning to demonstrate their MSR in the early 2030s. Some observers are already looking ahead to a time when American and Chinese companies producing MSRs will compete for customers abroad.

“The whole advanced reactor category is an area where there’s going to be conflict with China, because the countries for which these reactors are well-suited have smaller electrical grids that couldn’t absorb a big reactor,” Luongo says. “A lot of these countries where these much smaller reactors could be located are going to be commercial conflict areas between the U.S. and China.”

Efforts are also underway not only to upgrade traditional nuclear technology, but to perfect smaller reactor designs. Both China and the U.S. are pursuing the development of small modular reactors (SMR), which use traditional pressurized water reactor technology, but offer it in a more compact, flexible design. 

“I think everybody is trying to make [nuclear technology] simpler, easier…and also to reduce nuclear waste as much as they can,” says Shengke Zhi, director for growth and development at consulting firm Wood. “When you look at the price of a nuclear new build program, I think the small modular reactor has a huge advantage, because they are much cheaper.”

SMR developers are pursuing capital cost targets of around $5,969 per kilowatt, compared to $7,740 for conventional nuclear reactors, according to a 2022 report by the National Association of Regulatory Utility Commissioners, a non-profit organization representing U.S. utility providers.

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