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Strategies & Market Trends : Greater China Stocks

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From: Glenn Petersen3/14/2011 6:44:32 PM
1 Recommendation   of 8334
 
Evan Osnos is a New Yorker staff writer living in Beijing.

His blog: newyorker.com

His Twitter account: twitter.com

China’s Nuclear Binge

Posted by Evan Osnos
March 14, 2011



It’s too soon to know what went wrong—and what went as well as could be expected—at Japan’s nuclear plants, but watching one of the world’s engineering powers struggle to stem the damage to its plants reminded me of a squib of news from November that didn’t attract much attention at the time: a Beijing court gave a life sentence to Kang Rixin, a senior Party apparatchik convicted of taking bribes and abusing his position to enrich others. One detail about Kang’s case stands out in retrospect: at the time of his crimes, he was the head of China’s nuclear-power program, the most aggressive nuclear-power expansion in the world.

China is in the throes of building more new nuclear power plants than the rest of the world combined. It is adding twenty-four reactors and quadrupling its nuclear-power capacity in the coming decade to some forty gigawatts. The pace is so fast that the country’s nuclear safety chief publicly warned in 2009 that China would encounter safety and environmental hazards if it did not make a point of ensuring good construction. “At the current stage, if we are not fully aware of the sector’s over-rapid expansions, it will threaten construction quality and operation safety of nuclear power plants,” Li Ganjie, director of National Nuclear Safety Administration, told the International Ministerial Conference on Nuclear Energy in April 2009.

Kang was detained four months later. His was a $260 million corruption case connected to rigged bids in the construction of nuclear power plants. Keith Bradsher, in the Times, wrote, “While none of Mr. Kang’s decisions publicly documented would have created hazardous conditions at nuclear plants, the case is a worrisome sign that nuclear executives in China may not always put safety first in their decision-making.”

China presents a unique dilemma for energy strategists: it is expanding nuclear power in a race to meet rising demand for electricity and replace heavily polluting coal power plants. If China’s greenhouse emissions keep rising at the rate they have for the past thirty years, the country will emit more of those gases in the next thirty years than the United States has in its entire history. But this week has laid out in all the detail we could imagine what could result from the combination of rapid construction, poor oversight, and events that were previously dismissed as unimaginable. In some cases China builds world-class pieces of infrastructure, but we have also seen a steady drip of deeply disconcerting examples of a system growing too fast for its own good. Most recently, when Liu Zhijun, chief of the Chinese Railways Ministry was sacked on corruption charges, it emerged that his agency—celebrated for installing high-speed trains—installed concrete bases for the nation’s train tracks that used cheap, faulty chemical hardening agents, which don’t allow trains to maintain their current speeds of about two hundred and seventeen miles per hour for long.

So, how do some of these Chinese plants look up close? For that, I called Andrew Kadak, a professor of nuclear science at M.I.T., who has worked closely with Chinese nuclear officials at the Daya Bay plant in Shenzhen. “I served on a safety oversight board at the Daya Bay plant, and we had free access to the facilities, including all levels of management. These are basically French-designed plants, and they were very well maintained. And our goal was to try to create a U.S.-type operating culture, and we tried to do that, and the Chinese were very receptive to that.” He went on, “The plants that are now being built have all the current state-of-the-art designs in them. The plants that failed [in Japan] were relatively old. That’s the good part. The unknown, of course, is how do you plan for a humongous earthquake and a humongous tidal wave, especially when they are situated in a place vulnerable to this kind of upset.”

I asked if Chinese plants are being designed to defend against those kinds of events. “Our safety reviews were more about day-to-day safety. We looked at their probabilistic risk analysis.” They did not have access to seismic analyses, Kadak said. “I’m assuming that the regulator would be doing that.”

Photograph: Daya Bay nuclear power plant.

newyorker.com
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