China’s Nuclear Supply Chain Movement: from Localization to Globalization

//China’s Nuclear Supply Chain Movement: from Localization to Globalization

“Going Out” is currently the biggest hit world of China’s nuclear industry, which includes not only the reactor technology (read my previous article about China’s nuclear technology going out) or China’s huge nuclear financing but also the nuclear upstream industry. But before the industry can go out of China, it should dominate the domestic market at first.

From 1% to 80%

China has declared its technological self-sufficiency target since the first nuclear power plant Qinshan Phase I was built in 1980s. However, for China’s biggest nuclear project in 1990s Daya Bay Nuclear Power Plant, only 1% of the operation equipment is produced domestically. Few years later, when China started to build Lingao Nuclear Power Plant Phase I next to the Daya Bay project, 30% of the power plant installations were manufactured in Chinese factory.

(Lingao Nuclear Power Plant Phase I)

In 2006, Chinese government set up the goal for Hongyanhe nuclear program to reach 75% self-sufficiency rate by cooperative working of China National Nuclear Corporation (CNNC), State Nuclear Power Technology Corporation (SNPTC), and China General Nuclear Power Corporation (CGNPC) to develop their own technology of large forging devices and nuclear-level valve. In the following few years, almost all core technologies of nuclear power plant has got a breakthrough in China by deepened independent research and widened international corporation.

When it comes to 2010s, the embarking of China’s nuclear power plants project brought a big prosperity for civil-use nuclear equipment industry. According to the Ministry of Industry and Information Technology statistics, in 2014, Chinese company supplied 80% of the equipment for current nuclear power plants construction.

As for the Hualong-1 reactor which was designed and developed by China alone in Fuqing Nuclear Power Plant, all core equipment used in conventional island and nuclear island is manufactured by Chinese enterprises. For example, pressure vessels are produced by China First Heavy Industries, steam generator and conventional island turbine are supplied by Dongfang Electric Corporation, and the main pump is manufactured by Harbin Electric Corporation. Over 85% of the unit are Chinese.

(Hualong-1 reactor in Fuqing Nuclear Power Plant)

From the Internal to Global Market

According to China’s 13th Five-Year Plan (read my previous analysis about Opportunities of China’s Nuclear Industry Seen from China’s Next Five-Year Plan), China’s total installed capacity of nuclear energy should reach 58 million kW by the end of 2020, additionally with 30 million kW of nuclear power reactors under construction. This target urges China to build 6-8 nuclear reactor units per year. When reflected into the nuclear equipment manufacturing industry, over 40 billion Chinese yuan (US$6.2 billion) has spent by the industry as the budget for research and development said by the Ministry of Industry and Information Technology. It is very exciting to see the outcome of the 40 billion budget will effect.

(China’s Prime Minister Li Keqiang visited a nuclear equipment manufacturing enterprise)

“Nuclear power equipment, to a certain extent, represent the highest technological level of the manufacturing industry. To realize China’s “Go Out” strategy, to the nuclear industry, it is not only about the reactor technology but also importantly depending on nuclear equipment producing ability” , said the Chief Engineer of China Machinery Industry Federation.
Now, in my opinion, China has the comprehensive production capacity to meet the internal needs and Going-Out needs, and I believe it could be a new normal for China’s nuclear manufacturing industry.

Do you agree?
Or do you think that western companies can play a role in China’s export ambitions?

China’s nuclear supply chain will be discussed during the 4th edition of Asia Nuclear Business Platform which will take place 18-19 May 2016 in Hong Kong.

By |2019-01-05T13:03:33+08:00November 19th, 2015|industry-insights|0 Comments