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DE RUEHGZ #0086/01 0490618
ZNR UUUUU ZZH
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FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 1394
INFO RUEHOO/CHINA POSTS COLLECTIVE 0474
RUEHBJ/AMEMBASSY BEIJING 1147
RUEHGH/AMCONSUL SHANGHAI 0403
RUEHCN/AMCONSUL CHENGDU 0404
RUEHSH/AMCONSUL SHENYANG 0413
RUEHHK/AMCONSUL HONG KONG 0470
RUEHIN/AIT TAIPEI 0346
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHINGTON DC 0254
RHMFISS/DEPT OF ENERGY WASHINGTON DC 0064
RUEAIIA/CIA WASHDC 0442
RUEKJCS/DIA WASHDC 0438

UNCLAS SECTION 01 OF 03 GUANGZHOU 000086 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/CM, EB/ESC, OES/ENV, INR/EAP; 
USDOE FOR OFFICE OF THE SECRETARY 
USDOE FOR INTERNATIONAL AFFAIRS 
USDOE FOR FOSSIL POLICY AND ENERGY 
STATE PASS TO NUCLEAR REGULATORY COMMISSION 
USTR FOR CHINA OFFICE 
BEIJING FOR FCS, ESTH AND DOE 
USDOE for Nuclear Energy/Miller, Lyons, Herczeg, Gillespie, 
McGinnis 
USDOE for NNSA/Baker, Black, Whitney, Huizenga, Bieniawski 
USDOE for PI/Sandalow, Yoshida, Cutler, Huangfu 
 
E.O. 12958: N/A 
TAGS: TRGY ENRG ETRD EINV PGOV TW CH
SUBJECT: Guangdong and Fujian Take the Reins of China's Nuclear 
Renaissance 
 
REF: 09 Guangzhou 080 
 
GUANGZHOU 00000086  001.2 OF 003 
 
 
(U) This document is sensitive but unclassified.  Please protect 
accordingly. Not for release outside U.S. government channels. Not 
for internet publication. 
 
¶1. (SBU) Summary:  Over one third of the total nuclear generating 
capacity set to come online in China by 2020 will likely be 
concentrated in two southern provinces: Guangdong and Fujian.  Home 
of the nation's first nuclear reactors in Daya Bay -- which along 
with two units at neighboring Ling Ao power station account for 40% 
of China's current nuclear capacity -- Guangdong seeks to achieve a 
six-fold increase of capacity up to 24,000 megawatts (MW) by 2020. 
Fujian aims to build at least 10,000 MW in the next ten years, 
equivalent to 20-25% of the province's total energy needs.  Overall, 
China plans to expand its nuclear power generating capacity from the 
current 9,000 MW to somewhere between 40,000 and 80,000 MW by 2020. 
Access to abundant coastal water resources, proximity to megacities 
and energy consumption hubs, the lack of indigenous coal resources, 
and stable seismic conditions are all factors behind the central 
government's plans to scale up nuclear capacity in these two 
provinces.  A prominent nuclear scientist who returned to China from 
the United States in 2008 hopes that Fujian may become a center for 
nuclear research cooperation with foreign countries and possibly 
Taiwan.  End summary. 
 
-------------------------------- 
GUANGDONG SEEKS SIXFOLD INCREASE 
-------------------------------- 
 
¶2. (SBU) Of the 11 nuclear power reactors currently in operation on 
the mainland, four are located in Guangdong province, two at Daya 
Bay and two other one kilometer away at Ling Ao Phase I.  The 
combined capacity of these reactors is 3,758MW, representing over 
40% of China's total nuclear capacity.  With ten additional reactors 
approved or under construction and eight more proposed, Guangdong 
should easily meet its objective of scaling up nuclear generating 
capacity by a factor of six to 24,000MW by 2020, according to Hu 
Guangyao, assistant director for general management at the China 
Guangdong Nuclear Power Corporation (CGNPC).  Among projects 
approved and/or under construction, Hu explained to ESTHOff, CGNPC 
will build two more 1080MW reactors at Ling Ao Phase II, six 1080 MW 
units in Yangjiang and two 1700MW reactors in Taishan (reftel). 
Units currently in the proposal phase for Guangdong province include 
six 1000MW units at Lufeng and four 1250MW units in Shaoguan, an 
inland city. 
 
-------------- 
WHY GUANGDONG? 
-------------- 
 
¶3.  (SBU) Proximity and access to coastal water resources is a 
crucial factor behind the positioning of so many nuclear reactors in 
Guangdong province, a representative of CGNPC told ESTHOff during a 
January tour of the Daya Bay nuclear power plant.  High levels of 
energy consumption in megacities like Guangzhou and Shenzhen 
combined with the scarcity of fossil fuel resources like coal and 
oil also combine to make nuclear a logical choice for Guangdong. 
Stable geological conditions, i.e. low levels of seismic activity, 
provide another justification for scaling up nuclear capacity in 
this province. 
 
---------------------- -------------------------------- 
NUCLEAR TO MEET 20-25% OF FUJIAN'S ENERGY NEEDS BY 2020 
---------------------- -------------------------------- 
 
¶4. (SBU) Endowed with similar natural and geographical conditions, 
 
GUANGZHOU 00000086  002.2 OF 003 
 
 
Fujian has equally ambitious plans to expand its nuclear generating 
capacity.  Starting from zero, the province aims to build ten 
reactors and bring 10,000MW of capacity online within the next ten 
years, according to Li Ning, Dean of Xiamen's School of Energy 
Research.  With five reactors already under construction, Li 
predicted confidently that nuclear power will supply 20-25% of the 
province's energy needs within 5-6 years.  Four 1080MW units are 
under construction or planned for the coastal city of Ningde while a 
total of six 1080MW reactors will be located in Fuqing, another 
coastal city near the provincial capital of Fuzhou, according to 
published reports.  (Note: The World Nuclear Association estimates 
that Fujian's planned and proposed nuclear capacity will surpass 
13,000MW by 2020. End Note.)  Li also told ESTHOff that Fujian has 
been selected as the site for commercial demonstration of a 
fourth-generation 800MW experimental fast reactor, scheduled to 
break ground at the inland city of Sanming in 2012. 
 
------------------------------------------- 
WIND, SOLAR NOT RELIABLE SOURCES FOR FUJIAN 
------------------------------------------- 
 
¶5. (SBU) As Fujian seeks to diversify its energy supply by moving 
away from reliance on fossil fuels, nuclear power stands out as a 
superior alternative to solar and wind, according to Li.  One reason 
the province's investment to develop its nuclear capacity exceeds 
its investment in renewables is the weak potential of wind and solar 
power due to the relative shortage of natural sun and wind 
resources.  The development potential of solar power, in particular, 
is also hindered by the lack of a regulatory framework that provides 
incentives for individuals to purchase solar panels, a point that 
was stressed at a meeting with a top manager at Fengwei Energy 
Technology Co. in Xiamen.  The lack of direct government subsidies 
for individual purchasers is one challenge but the biggest obstacle 
is the inability for solar panel owners to realize a quicker return 
on their investment by selling surplus electricity back to the local 
power grid.  Wind power has even less potential in the near to 
medium-term in Fujian, the manager said, which may explain the fact 
that only one wind turbine producer in the entire province - XEMC 
Datang Wind Power Company in Zhangzhou - is capable of manufacturing 
MW-class turbines. 
 
---------------- ----------------------------------- 
WESTERN STRAIT - FOCAL POINT FOR NUCLEAR DEVELOPMENT 
---------------- ----------------------------------- 
 
¶6. (SBU) Li Ning of the Xiamen Energy Research Institute commented 
that the completion of ten nuclear reactors in Fujian by 2020 
combined with the eight existing reactors in Taiwan will transform 
the Taiwan Strait into the focal point of China's nuclear 
development.  In order to advance nuclear development in this zone, 
Li has proposed the establishment of a Western Strait Nuclear Power 
Technology Research Center at Xiamen University's new Xiangan 
campus.  The goal of the research center would be to provide a venue 
for "high-level collaboration with elite research institutions and 
corporations both at home (China) and abroad."  Li asserted that 
future U.S.-China nuclear technology joint demonstration projects 
should move beyond Beijing and Shanghai to cities like Xiamen.  This 
would have the added benefit of assisting development of the Western 
Strait Economic Zone, which the central government has established 
in Fujian, and increasing nuclear cooperation with Taiwan, according 
to Li.  (Note: Before agreeing to return to China to fill an 
"expertise gap" in nuclear technology, Li was associate director of 
the Lawrence Berkley National Laboratory in the United States.  In 
addition to his current position at the research institute, Li also 
serves as director of Asian development for the Bill Gates-invested 
nuclear innovation outfit TerraPower.  End note.) 
 
 
GUANGZHOU 00000086  003.2 OF 003 
 
 
----------------------------------- 
PUBLIC OPPOSITION STILL A CHALLENGE 
----------------------------------- 
 
¶7. (SBU) Hu of CGNPC told ESTHOFF that his company had encountered 
local opposition to the construction of the nuclear power stations 
proposed for Shaoguan and Lufeng in Guangdong province.  Although he 
did appear reluctant to discuss it, Hu told us that under Chinese 
law nuclear companies like CGNPC must obtain local government 
approval before proceeding with a project.  He pointed out that 
CGNPC had tried to increase public support for nuclear power plants 
by holding exhibitions to popularize nuclear science and by inviting 
residents of these cities to visit existing plants to assuage their 
safety concerns. 
 
GOLDBECK