BEIJING China will approve a small number of new nuclear reactors before 2015 to be built only in coastal regions, the government said on Wednesday, as it unveiled a raft of measures to spur private investments in energy.
In its latest five-year plan for the energy sector, China said it would also promote price reforms for electricity, coal, oil and natural gas and pledged to boost its hydro, solar and wind power generation in an effort to cut emissions.
The approval of new nuclear safety and development plans comes after a near 20-month ban by Beijing on approvals of new plants following the Fukushima disaster in Japan.
The latest plan could pave the way for Beijing to resume approvals, which would be a boon to Chinese nuclear power equipment makers including Shanghai Electric Group Co. and Dongfang Electric Corp., whose long-term contracts have been frozen during the ban.
In a decision that could be good news for foreign reactor builders including France's Areva and U.S.-based Westinghouse, which is owned by Japan's Toshiba, China stipulated that new reactors would need to adhere to "third-generation" technology that meets the highest international safety standards.
China's current fleet of nuclear reactors is mostly second-generation and is based on a variety of designs from Canada, France and Russia.
The country is building four Westinghouse-designed AP1000 third-generation reactors, which will be the first of this model to go into operation globally, as well as two Areva EPRs in the southern province of Guangdong.
Before the disaster in Japan, China was widely expected to more than double its existing target of 40 gigawatts (GW) of nuclear capacity by 2020, despite concerns about the reliability of its second-generation technologies as well as a shortage of regulators, safety inspectors and skilled staff.
The new sector guidelines include no new capacity target, but industry experts have said a more realistic figure would be 60 to 70 GW. Total capacity amounted to 12.57 GW by end-September.
MORE PRIVATE INVESTMENT
In the wide-ranging document, Beijing also vowed to encourage more private investment in its state-dominated energy sector.
Included in the list of possible private investment targets were the exploration and development of energy resources, coal processing, oil refining, renewables, the construction of oil and natural gas pipelines and the electricity sector.
"All projects listed in the national energy program, except those forbidden by laws or regulations, are open to private capital," the document said.
Beijing also said it would welcome foreign investment, by the way of joint ventures, to develop its unconventional oil and gas resources. It also encouraged foreign investment in the building of nuclear stations and some lower-emission coal-fired power stations as long as the Chinese parties have control.
"China needs energy investment, that's why the government is encouraging private and foreign investment. But it is too early to say if they will have any material impact on the energy sector," said Wang Aochao, head of research at UOB Kay Hian in Shanghai.
Private firms currently are shut out of lucrative energy projects. Its oil market is dominated by two large state-owned oil companies, Sinopec and CNPC, which control domestic wholesale crude oil pricing.
China is preparing for a once-in-a-decade leadership transition in November, and its new leaders are widely expected to push for the sort of market-oriented reforms that will break up monopolies in sectors such as energy.
The government will speed up the reform of its state-owned enterprises, including the railway, postal and salt industries, and lower the threshold for entry into the telecoms, power, oil and petrochemical industries, the head of State Asset Supervision and Administration Commission said separately on Wednesday.
Large state enterprises will have to list their main business if conditions allow, Wang Yong was quoted as saying by state media Xinhua. For those not fit for listing, Beijing will encourage them to restructure and will introduce corporate governance rules.
(Additional reporting by Judy Hua; Writing by Fayen Wong; editing by Jane Baird)