The future of the nuclear power industry lies in China. The Chinese are presently building more nuclear electric power generating stations than any other country. This year, the Chinese will add three more nuclear power stations to their fleet bringing their total up to 40, while eighteen nuclear plants are also under construction. According to MIT estimates, the Chinese can erect a nuclear plant for half the cost of a plant here in the U.S. If so, what’s the problem? First, let’s put the numbers into perspective. Nuclear power accounts for about 4 percent of Chinese electric power production. (Nuclear accounts for about 20 percent of electric power generation the U.S.) Solar and wind generation accounts for 7 percent of production in China and the renewable component has been growing far faster than nuclear. Chinese industries spent $127 billion in 2017 on developing renewables. Returning to nuclear plant costs in China, MIT estimates show a two-to-one Chinese cost advantage over the U.S., based on “overnight costs.” This is an engineering concept. that gives short shrift to potentially major construction expenses such cost of capital, duration of project or risk of error and subsequent redress (either actual or compensatory). Appropriately valuing the true cost of capital alone could raise these so called overnight nuclear new build costs by at least 25 percent. Adding insult to injury, perhaps half the Chinese nuclear fleet presently under construction is behind schedule and there are reports of (typical for this industry) cost overruns and construction problems. Now, let’s get to the disturbing item in the MIT analysis as far as the nuclear power industry is concerned. The money quote? “Officially China still sees nuclear power as a must have. But unofficially, the technology is on a death watch.” The Chinese appear committed to completing all of the eighteen or so nuclear projects presently under construction, but they have not announced a new commercial project since 2016. This would give China 58 GWs of installed nuclear capacity by 2020 with another 30 GWs presently under construction. Not that much smaller than the U.S.
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