Is China the Future of Nuclear Energy? feat. Francois Morin

Yes, good morning everyone. I was trained by nuclear physics and by biophysics too. I made some research and research reports interesting in the laboratory in the French Atomic Energy Commission under the supervision of Professor Francois Jacob, who was a Nobel Prize in Medicine. And I made some research in the molecular transfer in membranes using radioactive elements, so it's why it was within the French Atomic Energy Commission. But then I had several activities, including what you mentioned as scientific attache in the USSR. And then when I came back, I was making research on how to implement a modification, upgrade, update after Chernobyl on French power plants. So I was evaluating, considering the large accident, the long-term consequences of large accidents, typically what happened in Chernobyl and Fukushima. But then after a few years, I left for other activities, and among them I can quote my time in nuclear medicine. I went back to the French Atomic Energy Commission and I worked a few years in nuclear medicine. That is to say that I have been knowing China for a long, long time. And even when I was a student, I had chosen at that time Chinese language as an option together with Russian.

Yes, I started at university.

You kind of interpreted what was coming in the future, I think. Relatives or people I knew, some were commenting, 'But are you communist?' because it was the only common point between these two languages, because they have no roots in common in any house. So they said, 'Are you communist?' to explain it through logic. And I said, 'No, but these two countries are the future.' Yes, it was my best at that time.

So you know, in our university at that time, we were 300 students. It's nearly the same now. Among the 300, we were 18 studying Russian and five studying Chinese.

No, but you're right, Chris. In fact, quite often in Western countries, we are keen to consider that a nuclear plant is a big goal. But the nuclear plant itself has not the same image for many reasons. One of them is that China is still a developing country. Even if you go to Shanghai and Beijing, you see amazing progress and level of life which has nothing to envy to our Western cities, but still, it is in a whole still a developing country. And technological things are appreciated, and people see a kind of wonder in that. It was the goal of the Communist Party in China to make people convinced only by science somehow.

There is also in China an obvious advantage or superiority even of nuclear. It's very clean. This feeling you have when you go to a big cement factory or a steel company, you don't have this feeling of cleanliness. But a nuclear plant is very clean. So you don't have to convince people that nuclear power is a good tool to fight pollution. You don't have to explain it; it's visible.

Yes, first there are two different things. You have the central government taking a centralized decision. This of course played a role for developing the nuclear bomb in the early 60s, definitely. But then Deng Xiaoping came to rule and he made the new China, we can say.

He created this confidence in the diversity, and the Chinese government today is not ruling everything from the center saying, 'You must do this direction.' It's not exactly true. The Chinese government is somehow, I would say to make it short, managing diversity. And that's also because, I mean, for outsiders to understand how large China is, how populous it is, one province is like Germany in population. Guangdong province is governing one point something billion people. So it looks very small, but when you take the provinces where nuclear is active, it's all along the coast, the east coast. The provinces have 50 million, 60 million, 100 million inhabitants, and there the nuclear share in the mix is already 25%, 23%, 18%. So if you look at China as a whole, one country, you will never grasp the idea of the roles of not only nuclear energy but any kind of other industry. So we should look province per province.

To be honest, Chris, to be honest, Chinese development in the 90s and until 2010 nearly was mainly due to foreign investment. So the first... I understand. When you look at foreign investment in China compared to foreign investment in India, it explains a lot.

Yes, it's a fascinating history. It's amazing, but it makes sense when you see that people are eager to learn. What I was fascinated by when I discovered China in the 80s, Chinese people everywhere were studying something. They were reading books, they were repeating sentences, they were studying all the time. So they have been very eager to learn, and this is something that all Chinese have in common. Sometimes it's a burden on young people and pupils at school. Many Chinese dream of sending their children abroad for studying, not only for the consequences in terms of visa and possibility to live abroad, but also because the burden is not so high as it is on the shoulders of the pupils.

Yes, they love learning. There is an actual sincere love for knowledge and science, and this explains a lot. It doesn't explain all, but it explains a lot.

I am not sure if there is any advantage of being a nuclear electricity world first supplier. I'm not sure being a nuclear power is something, but being just a nuclear electricity supplier is another thing. And I would not say that being first in producing cars or in producing solar power is also meaningful. But it's not a goal by itself. Chinese are not looking for being the first in nuclear production. What's the rationale for developing nuclear in general? I think it is still the extremely strong demand in electricity. The Chinese average consumption per capita per year is nearly 5,000 kilowatt hours, a little less than 5,000, when it's 11,000 something in the US. At that time maybe, and now it's nearly 5,000 with a big diversity. We have poor provinces where the consumption is only 800 kilowatt hours per capita per year, where you have provinces around Shanghai or Beijing where it's over 6,800. So you have discrepancies in the country, but on average it's only 5,000. So some people, I see that quite often when I read Bloomberg News, that the Chinese energy market is saturated. But it's not. The goal of having zero carbon or less carbon economy by 2050, one important point to get that is to increase the electricity share in the economy. So electrify everything. Electricity for everything, including for cars. So this is a strong drive to increase whatever source of power, including, I may disappoint you, but including coal.

With the... and this was about energy consumption. You were saying that the projected increase in energy consumption just for 5G infrastructure or internet infrastructure would consume all of the current output of China.

And that's about 40 gigawatts, is it?

Yes. To come back to one of your previous questions, young people in China now would rather work for Alibaba or a 5G related company than in nuclear. But one doesn't go without the other. So people are forgetting that what they are developing now, even if it looks purely non-physical, requires a lot of material things.

Yes, being a centralized decision somehow helps. But not because one guy decides for everyone; it's because economically, only from the economic point of view, nuclear is profitable in China for the nuclear companies, and they make a lot of money. Billions of money. CGN or CNNC are very profitable. They make not only nuclear but also other things. They have a big share, an increasing share of their production up to 30% to 40% in some regions. They are selling this production on the free market somehow, not under the tariff fixed by the government. So they sell it at a lower price and they still make money. The main reason for that is the support they get from the government, but not in the sense you may imagine. It's in another sense: they have a low rate loan from the banks. And this is the key. The interest rate is very low. What they did in the past, be it roads, airports, railways, it is always, till today, enormous infrastructure which are very costly by themselves. Look at the Berlin airport, which was several billion euros over budget and 15 years delayed. An airport. This does not happen in China. For the airport also, it doesn't happen. They build airports very, very fast. So nuclear is just on the same way. There is nothing specific.

Sometimes they miss the target and they don't make money, they lose money. It happens too, but they are ready to sacrifice their profit, the revenue, for the sake of long-term success. And it's true at the company's level, not only at the governmental decision level.

Yes, because the demand is high. But the problem you are mentioning of the peak supply by wind and solar, this problem is reaching China also. It is not entirely visible why. Because they are able to use 100% of the electricity they produce, because their level of development is very low compared to the eastern part. And second, they cannot physically export these energies because there are more and more high voltage transmission lines now, but they are still very costly, and it puts the cost of solar power produced in Inner Mongolia, for instance, for the eastern coast, at twice the price of the local nuclear kilowatt hour.

Yes, because if you say China imports coal, it doesn't make sense. They themselves have so much coal. But if you look at south of China and north of China, then the situation is different. And it happens that the coal supply to southern China coming from Indonesia was cheaper locally than the coal coming from the north.

Yes, it's two thousand kilometers roughly. They have to buy in advance the transport, and the pressure on transport makes it a high price and not very manageable. It's less manageable for Guangdong province than buying coal from Indonesia.

Yes, it serves itself as an argument or an excuse, depending on which side you are, for building nuclear, but not only for building all what is non-coal energy, including dams, solar plants, and wind farms. They are in need of everything, so this is the real drive. Now regarding the pollution, yes, I've been living in China all this time and I saw myself the pollution rising from around 2007 to 2015. I would say the pollution was only increasing in Beijing city. I remember being in northern China and you couldn't see further than 100 meters because of the smoke. But this has changed after 2015. The peak was probably 2015. So the peak has nothing to do with... it is used as an excuse: 'Look, the pollution is not bearable, you could not... should understand that, so support nuclear.' Yes, it plays a role, but the fight against pollution was done with the closure of many factories, steel, cement. All these kind of factories were displaced from around the big cities to more remote locations, and this helped to relieve the urban areas.

I think so, yes. In fact, you're right. Pollution played a role, climate change is a selling point. The best proof for that is that President Xi Jinping talked about 2060 net zero carbon in China only last September, while the plan to build six to eight reactors per year started much before the climate change issue.

Yes, I anticipate that by 2030 China will be the first nuclear producer in terawatt hours. Last year, France produced only 300 something, so France was behind China, but it is true that France was at a lower level than in 2019. The 2019 level in France was still higher than 2020's level in China. But anyhow, within two years, China will be the second for sure, and will be the first around 2030, and will go on developing. What is amazing is not that it will get the first rank in 2030, but that it will not stop there. It will go up to 300 gigawatts, maybe not with the same technologies. They are now building fast breeder reactors with the help of Russians, so the technologies will be different, but the move will be slow from PWR to fast breeder.

Yeah, you're right. Maybe on the east coast, nuclear share will not... Another 100 gigawatts in China, but even when this is obtained, you have all the other provinces that will be somehow like new nuclear countries, and they will want to have their 10% or 12% or 15% share in nuclear, and this is another 200 gigawatts.

I don't think that China will energetically rule the world. China is importing more... If they can build stuff on budget and on time, I could see rather than selecting the EPR for some future site in the UK, geopolitics will probably interfere with this a lot. But you could imagine saying, 'We want to build a nuclear plant on budget and on time. Who does that well?' It was the South Koreans for the UAE, but that may more and more become China as this nuclear freight train gets moving and the supply chain is incredibly well greased, the workforce as well. Many infrastructure projects overseas that China does, they just bring in the whole labor force, which frustrates the local population. But there are many people in China within the nuclear industry. They have been saying for many years that selling one nuclear reactor is equivalent to the sale of one million cars in terms of revenue and working forces created in China for such export. But you don't see that many Chinese cars abroad. There are many Chinese car manufacturers, but we don't usually see Chinese cars on the roads. So China can develop its nuclear power without exporting quantities of it. Its local market is enough for supporting the development of the nuclear industry. However, they are now understanding the importance of being accepted worldwide, and it's why they are working with the UK, but not only with Poland, Turkey, even with South Africa, Saudi Arabia, Jordan, Indonesia, Thailand. Russia has 134 billion US dollars in their orders in nuclear power equivalent, and China has only two reactors in Pakistan. They want to copy, they have been stimulated by the success of Rosatom in the world, and they believe they can do the same, but they know their own weak points. They don't have the geopolitical power that Russia has. In other countries, it's more difficult than for Russia, who are well established in Egypt and Turkey. They know they have to work on that, to make the Ministry of Foreign Affairs and the Ministry of Industry work together, which is difficult in China. Also, they know they have to enrich their offer, not only in building a Hualong, but also to propose a whole fuel cycle, including reprocessing and storage. It's a complex issue. It's not just selling a Hualong for 10 pounds less than the EPR per megawatt hour in the UK. For developed nuclear countries like the UK, it's easy, but for all other countries, it's not the same. So they are working on that. The development of Hualong is very satisfactory; they have 12 plants under construction, but it's not as easy as it looks.

In fact, what surprised me is that we don't have yet... right in 2021, we don't have the experience enough to check. But what we nearly have is the construction cost. Strangely, this cost is not as low as it could have been expected. It's only 7% cheaper than the Westinghouse AP1000 built in China. They are not as cheap as we expected them to be.

For instance, here the price in... I didn't translate it into US dollars, but you have 15,600 for the Hualong, 18,300 for the AP1000, and 16,800 for the EPR. So the difference is not that big. And again, it's the construction... for the same infrastructure, when you have a bigger output, you have economy of scale. So the more expensive EPR might become the same price in terms of kilowatt hour in the coming years. It's not as cheap as we would like. Also, don't misunderstand the Chinese advantage. We have been used in the West to buy toys for children because they were cheaper.

It happened already. In fact, you have many protests of all kinds in China on many topics, a lot of them related to environmental questions. You have maybe 200,000 protests a year across China for all reasons. So don't think that China is free of public protest. It happens, and it happened also for nuclear projects. It happened in 2014 for a project in Guangdong province which was not a nuclear plant but a nuclear park. It was a joint venture between CGN and CNNC. These are the two big nuclear companies in China. They made an agreement which was very difficult for them because it was 50-50, not 49-51. It's psychologically very complicated in China to get such an agreement. Between Chinese and foreigners, there is no problem; Chinese want 51%. But between themselves, it was a fight. Finally they agreed, but there was a protest in the street with hundreds of people. The same happened in August 2016 in the northeast, near Shandong province, above Shanghai, halfway between Shanghai and Beijing. There was a protest against a place where they were operating two reactors. Now there are four reactors operating and two under construction. In this very place, there was a plan to build a reprocessing plant with the French company Orano, and people protested in the street for one day. The government used the protest as a manipulation to cancel the project. It doesn't mean the protests were not true, but they were a little too easily followed. A half-day protest shutting down a multi-billion dollar project? I have some doubt about this. But more generally, when Fukushima happened in China, all the shelves in the shops in southern China went empty, particularly the salt. You could not find salt. People got more confident about the news on TV. There is a kind of sensitivity to this question. They are following what happened in Fukushima. Last week there were several articles in China about post-Fukushima consequences in Japan, but always with the conclusion that Japan cannot do without nuclear.

There was an earthquake in 2006 in Sichuan province which killed 15,000 people, maybe 7,000, I forgot the exact number, but it was a big catastrophe in China. They are used to that. Also, floods happen along the rivers. They cannot make the confusion between an earthquake and a nuclear disaster. All of Asia has experienced enough earthquakes to make the difference. In South Korea, there was a movie called 'Pandora' about a Fukushima-like disaster. It was seen by two million people and had a big impact on the polls. The current president of South Korea promised that if elected, he would stop nuclear construction. That played a big role. In China, they are taking advantage of these constructions. They are supporting development, and you have educated people who are enthusiastic about new technologies. Don't forget that in the West, we have forgotten that the nuclear reaction itself is a kind of wonder of nature. The fact that we can get energy out of it is the second wonder. Radioactivity is at the very root of life on Earth. Probably without radioactivity, there would be no life. There are nuclear reactions within the center of the Earth that make the core move, and this movement enables the magnetic field. This magnetic field, together with the movement of the moon, makes life possible on Earth. It is also possible that radioactivity played a role three billion years ago for the first split of the first multi-cellular organism. There are many reasons to believe that radioactivity is not threatening us, but on the contrary, is one of the secrets of life and the world. I think that Chinese are mentally more open to that. Look at what they did for COVID-19. They tried everything because with humility they know that we cannot decide what is absolutely right and all the rest is absolutely wrong. There is only vaccination and all the rest is wrong? Chinese believe that we don't know. They have the same attitude towards many things, including the wonders of nature. I'm sure that this plays a role in the mentality towards this energy.

My pleasure.