IEEJ: March 2012 All Right Reserved
Special Bulletin

A Japanese Perspective on the International Energy Landscape (76)February 17, 2012

Chinese Nuclear Energy Development Showing New Moves?
Ken Koyama, PhD
Chief Economist, Managing Director
The Institute of Energy Economics, Japan

While it is needless to point out that developments in China represent one of the mostimportant factors influencing the international energy situation, the nation’s nuclear energy
development is attracting attention after a media report that China could raise its nuclear power
generation capacity target for 2020.

The China Securities Journal reported on February 14 that China's nuclear power
generation capacity target for 2020 could be raised to 80 GW. This reported target far exceeds the 70
GW cited among experts over the past year since the March 2011 Fukushima Daiichi Nuclear Power
Plant accident. As is well known, China has proceeded with aggressive nuclear energy development
to meet the growing energy demand including electricity. As of August 2011, 14 nuclear reactors
with a total capacity of 11.8 GW were in operation in China. In addition, reactors with a total
capacity of more 30 GW, tripling the existing capacity, were under construction.

Even in China that has proceeded with rapid nuclear energy development, discussions
have grown with regard to the development in response to the Fukushima accident. At a meeting of
the State Council Standing Committee last March 16 just after the accident, plans were announced toemphasize the need for enhanced safety in nuclear power generation, to prepare a relevant nuclear
safety enhancement program, and to suspend the examination and approval of new nuclear plant
construction projects during the preparation. While nuclear plants under construction have remained
unaffected and thus it is expected that China’s nuclear power generation capacity will substantiallyexpand with the completion of plants under construction, the fate of new nuclear plant construction
projects and the capacity expansion target have attracted global attention. In this sense, theabovementioned report, as a sign indicating a new move regarding nuclear energy in China, is very
important, although it fails to represent any confirmed facts or an official government announcement
and also includes uncertainties.

In our institute’s “Asia/World Energy Outlook 2011” published last October, future
prospects for nuclear power generation were a key point. The outlook projected China’s nuclear
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power generation capacity in 2020 at 60 GW for the Reference Scenario, where the present trends
will continue, and at 70 GW for the Advanced Technologies Scenario, where various advanced
technologies will be introduced for energy security and environmental conservation. The
abovementioned report means that China could have a very ambitious target exceeding ourprojection.

The reported new move regarding the nuclear power generation capacity target indicatesthat China has given priority to nuclear energy in its energy supply/demand measures and policy andthat China has made no change to its basic recognition of the priority given to nuclear energy evenafter the Fukushima accident.

As a matter of course, China may give top priority to the enhancement of safety inresponse to the Fukushima accident. Nevertheless, China might have positioned aggressive nuclear
energy development in addition to the promotion of energy conservation, natural gas and renewableenergy as a key option to improve its electricity supply structure, which now depends heavily oncoal thermal power generation, and implement global warming prevention and other environmental
measures.

Following the abovementioned report, attention will be paid to official comments by thegovernment or senior-level government persons on the 2020 nuclear power generation capacitytarget. At the same time, we may have to pay attention to a specific nuclear energy target for 2015
under the 12th five-year development plan.

China’s policy of promoting nuclear energy development on the premise of enhanced
safety is very significant. China is required to retain the premise. The present nuclear plant
construction and nuclear power generation targets for 2015 and 2020 for China indicate the world’s
largest and fastest ever progress in nuclear energy development in history. This point is of greatimportance. Such rapid nuclear energy development has never been seen in the United States, Franceor Japan. In this sense, China now faces great challenges including the introduction of advanced
technologies, the securement and investment of appropriate personnel, and the thorough promotionof safety-oriented culture.

In response to the rapid energy demand expansion since 2000, China has so far increased
energy infrastructure, including coal thermal power plants and oil refineries, substantially andrapidly. The country has demonstrated its capacity to meet the rapid energy demand expansion. As it
has been recognized anew through the Fukushima accident that nuclear energy includes sources ofgreat potential hazard while also featuring large-scale, efficient electricity supply, however, thethorough enhancement of safety is an urgent top priority for nuclear energy development.
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In this sense, the integrated and harmonized combination of nuclear energy development
and safety enhancement is significant not only for China but also for the entire world. Therefore, notonly China’s own efforts and measures but also its cooperation with relevant countries withadvanced technologies and personnel are of great significance. For Japan, it is inevitable to makebest use of lessons learned from the Fukushima accident. Such Japanese efforts will make important
contributions to the international community including China. Based on such efforts, Japan may berequired to proceed with international cooperation as much as possible to further enhance safety.

Contact: report@tky.ieej.or.jp
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