CONSULTING

directed by government planners to do so, the two organizations jointly developed the Hualong
One, which was certified by the National Nuclear Safety Administration in 2014. 519 However,
CNNC and CGN are apparently promoting two slightly different designs, with separate supply
chains, under the same name. In March 2016, the two companies set up a 50-50 joint venture to
promote this design in overseas markets. 520
Construction of the Hualong design started domestically in China with units 5 and 6 of the Fuqing
plant in May and December 2015, as well as unit 3 of Fangchenggang in December 2015. The first
of these units “is expected to be completed by around June 2020”. 521 However, as these projects
proceed, construction of the Hualong at the Fuqing plant might be delayed, again because the RCPs
to be used in the design are already “falling behind schedule for (sic!) five months”. 522 Unlike the
AP1000 project that sourced its RCPs from the Curtiss-Wright company, for the Hualong design,
CNNC signed a supply contact with China’s Harbin Electric Power Equipment Corporation and the
Austrian manufacturer Andritz, who in turn have subcontracted with firms such as Italy’s
Foriatura to supply key components. 523 Other construction starts since July 2015, when the last
WNISR was published, include Tianwan-5, Hongyanhe-6, and Changjiang-2.
All these reactor construction starts and targets should be viewed in the context of a slowdown of
energy demand growth in China. According to data from the China Electricity Council, the 2015
power-generation level of 5,604.5 TWh was only 0.6 percent more than the figure for 2014. 524
Looking further out, in its 2016 Energy Outlook, the oil and gas firm ExxonMobil “lowered its
forecast for China’s annual energy demand growth to 2.2 percent through 2025. The report
predicted that the country’s energy demand would plateau around 2030”. 525 The slowdown of
energy demand, in turn, is a result of falling rate of increase of the Gross Domestic Product (GDP),
increased energy efficiency, and a change in the relative distribution of different sectors of the
economy, in particular a decline in the share of industry. 526 China also has a significant
overcapacity of coal-fired power plants, with average annual operating hours and capacity factors
declining steadily over the past five years. 527 One effect of this decline in demand and coal plant
overcapacity on the nuclear sector might be the 10 percent stake sold to Thailand’s Ratchaburi
Electricity Generating Holding Public Co. by CGN for its first Hualong project at Fangchenggang II,
519 WNN, “China’s new nuclear baby”, 2 September 2014, see http://www.world-nuclear-news.org/E-Chinasnew-nuclear-baby-0209141.html,
accessed 24 June 2016.
520 WNN, “Hualong One joint venture officially launched”, 17 March 2016, see http://www.world-nuclearnews.org/C-Hualong-One-joint-venture-officially-launched-1703164.html,
accessed 1 July 2016.
521 Reuters, “China’s debut Westinghouse reactor delayed until June 2017: exec”, Reuters, 9 March 2016,
see http://www.reuters.com/article/us-china-parliament-nuclear-idUSKCN0WB09F, accessed 16 June 2016.
522 C. F. Yu, “RCPs Pose Problems Again—This Time for Hualong”, NIW, 2016.
523 Ibidem.
524 China Electricity Council, Press Release, 3 February 2016, see
http://www.cec.org.cn/yaowenkuaidi/2016-02-03/148763.html, accessed 2 June 2016.
525 Claire Groden, “Exxon Cuts China Energy Demand Growth forecast”, Fortune, 26 January 2016, see
http://fortune.com/2016/01/26/china-energy-demand/, accessed 16 June 2016.
526 Fergus Green, Nicholas Stern, “China’s changing economy: implications for its carbon dioxide
emissions”, Climate Policy, 7 March 2016.
527 Fredrich Kahrl, “Coal-Fired Generation Overcapacity in China”, Regulatory Assistance Project, Beijing
(China), February 2016, see http://www.raponline.org/document/download/id/8038, accessed 9 July 2016.
Mycle Schneider, Antony Froggatt et al. 143 World Nuclear Industry Status Report 2016