China nuclear plan slowed, not stopped, by Japan quake

Activists from Greenpeace hang a giant banner with the words ''Nuclear is not the solution'' outside the Hong Kong Convention and Exhibition Centre, during the C40 Hong Kong Workshop of the International Conference On Climate Change, November 5,2010.

DAYA BAY, China (Reuters) - Japan's nuclear crisis has delayed, not halted, power-hungry China's ambitious nuclear reactor-building plans, but an understaffed regulator and incomplete laws are too weak to dispel the risk of accidents.

China put on hold approvals this week for proposed plants and vowed to reconsider long-term plans for 28 new reactors, or 40 percent of all those being built worldwide, as a nuclear crisis ticked down in neighbouring Japan.

Japan's worst earthquake, and the accompanying tsunami, have pushed ageing reactors to the brink of catastrophe and shone a harsh spotlight on the global nuclear industry as workers battle to cool overheating nuclear fuel rods at a crippled power plant.

But few expect that China, with its vast energy needs and pollution woes, will dramatically scale back its nuclear plans, despite concerns such as seismic weaknesses at future reactor sites and a slender regulatory infrastructure.

To maintain its dramatic economic growth, China is expected to need up to 1,500 GW of generating capacity by 2015, up by half from last year, and the reactors being planned would make up less than 3 percent of that.

But a pullback could shape the future of a global industry that sees China's nuclear expansion plans as a shop window for new reactor designs. Firms ranging from France's Areva CEPFi.PA to the U.S.-based Westinghouse, owned by Toshiba (6502.T), are keen for a slice of China's projects.

"With such high-speed development, I think it's difficult for the government to supervise properly," said Han Xiaoping, a senior analyst with China Energy Net, a Beijing-based consultancy.

VULNERABLE FACILITIES

Beijing has been at pains to stress that existing reactor projects -- including those under construction -- are far from the country's most seismically vulnerable regions.

All lie close to the eastern coast, and some have been built in secluded coves to minimise radiation risks.

But a host of cities in China's interior have also been lobbying to build their own nuclear plants, and many of the riskier ventures, including a proposed plant in rural Nanchong in earthquake-prone Sichuan, could now be turned down.

Nanchong, crowded with over 7 million residents, was on the outer edge of an earthquake that flattened entire towns in Sichuan in May 2008, and sustained about 30 of the total of 80,000 deaths it caused.

"The speed of nuclear development in China's interior certainly needs to be slowed down," said Han.

"No one really knows if the reactors we have built already are actually safe and we need to wait, and improve them if they have any problems, before we can build plants in the interior."

Safety fears have been aroused by incidents such as a September 2008 transformer fire at the Tianwan nuclear power plant, forcing the reactor to close. The magazine Caijing magazine said there were five similar safety accidents at the plant during that year.

Such concerns are amplified by the thinly stretched nature of China's nuclear regulator, which needs to more than quadruple its staff of 1,000 by 2020, the research office of China's State Council said in a report in January.

To meet the shortfall, crash training programmes have been launched and more students are studying nuclear engineering at Chinese universities, but such efforts may not fill the gap.

"The more reactors they add, the more thinly stretched the regulatory regime is going to be," said Mark Hibbs, an expert on nuclear policy at the Carnegie Endowment for International Peace, who is based in Berlin.

CUTTING CORNERS ON RISK

Experts also fear gaps in China's regulatory system might have led to corner cutting.

China lacks a transparent regulatory system, as its "atomic energy law", covering issues such as emergency planning and construction site supervision, has still not been ratified despite being drafted more than 25 years ago.

Recent corruption scandals have eroded confidence in China's ability either to regulate its nuclear plants or to improve transparency in the sector.

Kang Rixin, former president of China National Nuclear Corp, was sentenced to life in prison last November for taking almost $1 million in bribes. Jiang Xinsheng, head of nuclear reactor builder the China National Technical Import and Export Corp, got 20 years in jail last July for corruption and leaking state secrets in connection with a bid for foreign-made reactors.

China's has long struggled to find the energy to drive economic growth, which the government says was around 10 percent last year, with a target of 7 percent a year over the period 2011 to 2015, so it cannot reject the nuclear power option. It has also committed itself to cutting the use of fossil fuels.

While wind and solar capacity will increase in the next decade, nuclear energy, widely considered more reliable, was seen as the best way to square the circle.

There is no turning back from a nuclear future, the People's Daily, the country's official newspaper said on Friday, urging that Japan's crisis "should become an impetus for humankind building even safer nuclear power."

In a commentary, the paper said, "In fact, technological progress has constantly improved the security level of nuclear power. Always with ensuring safety as a prerequisite, let nuclear energy contribute to China's sustainable development."

Residents in the vicinity of one of China's oldest reactor complexes, the Ling'ao nuclear facility in Guangdong province, near Hong Kong, were unfazed by Japan's nuclear crisis, saying their reactor was a newer kind.

"It's a tragedy, but it only happened in Japan because of an earthquake... And there are no earthquakes here," said Zhong Muliang, the manager of a wine and tobacco store. (Additional Reporting by Chris Buckley, Maxim Duncan and David Stanway in Beijing; Editing by Don Durfee and Clarence Fernandez)