How the US contributed to the failure of the AP1000 in China

How the US contributed to the failure of the AP1000 in China

November 30, 2013, the AP1000 of Sanmen Nuclear Power Plant unit 1 will be commercially operational”.

That’s what the management of SNPTC believed when the contract for the introduction of the AP1000 was signed in July 2007.

A few months ago, on November 2, 2006, the Standing Committee of the Central Political Bureau of the Communist Party of China decided to introduce four units of the Westinghouse AP1000 and to create the State Nuclear Power Technology Corporation.

From December 2006 to July 2007, China and USA signed a memorandum of cooperation, several enterprises signed technology transfer contracts, including a large part of the design of the nuclear island, and equipment procurement contracts.

The AP1000 technology transfer was the biggest technology transfer between both countries and illustrated a substantive breakthrough in the US restrictions on high-tech exports to China.

  • Westinghouse guilty of counting its chickens before they were hatched

But in 2015, we see a blasted budget, a delayed project; China lost millions in research and development and the main pump is still not working.

Initially the US claimed the canned motor pump was manufactured and used for years… in nuclear aircraft carriers and submarines.

Some experts stated that Westinghouse and EMD did not take into account the technological leap needed to adapt a pump used in an aircraft carrier* to the AP1000. This is not the only problem: the administration is the real barrier.

  • The 10 CFR 810

The US government has strict federal control on technology exports, the 10 Code of Federal Regulations Part 810, which includes several countries and their companies in a specific authorization list, such as China.

The Department of Energy (DOE) has statutory responsibility for authorizing the transfer of unclassified nuclear technology and assistance to foreign atomic energy activities upon authorization by the Secretary of Energy, with the concurrence of the Department of State (DOS) and after consulting with the Departments of Defense (DoD) and Commerce (DOC), and the Nuclear Regulatory Commission (NRC).

The 10 CFR 810 implements a detailed nuclear technology export control list, including nuclear materials, special materials, special technologies and any type of expertise that can be considered as dual use, and any US companies involved in the introduction of the AP1000 in China such as Westinghouse, Shaw and the shield pump supplier EMD must have the 810 authorization issued by the government to carry on their nuclear business.

The US business community, and other lobbying group such as the NEI requested that China must be included in the general authorization list, because the actual status obstructs the capacity of U.S. businesses to compete effectively in global civil nuclear commerce.

Despite the fact that China has the section 123 agreement in force, the DOE has not modified the supplemental notice of proposed rulemaking (SNOPR) for the 810.

The answer from the DOE was as a blow for the business community: “After duly considering the comments and consulting with the Departments of State, Commerce and Defense, and the Nuclear Regulatory Commission, DOE remains of the view that it is not appropriate to change the part 810 specific authorization status of these three countries** at this time. Continuing their current status is justified for diplomatic and national security reasons (…) China and Russia are nuclear weapons states that have not provided the level of transparency regarding the division between their respective civilian and military nuclear programs to warrant general authorization of transfers of technology and assistance for peaceful use. DOE has granted numerous nuclear technology export authorizations to both China and Russia over the years. DOE would expect to continue making such authorizations in the future, based upon consideration of the specific facts of each proposed transaction”.

Since the canned motor pump is originally used in military vessels, such as aircraft carriers and submarines, it does not only apply to the strict export controls of nuclear technology, but also involves arms control.

EMD had to bypass the nuclear technology export control lists of the US government by developing new material not involved in the control list, implements new test, designs, research, and use more tungsten alloy. Furthermore, EMD detains the intellectual property of the research paid by the Chinese side.

  • Panic on board

The authorization granted to Westinghouse by the US government was terminated on August 2015.

The license can be extended if the applicant, such as Westinghouse and EMD submit a report to explain the reasons of the exports to China.

At this stage, we can see a visible panic from both sides. Li Ganjie, Vice Minister of Environmental Protection (State Secretary for Nuclear Safety Administration- NNSA) met Danny Roderick, CEO of Westinghouse on August 20 to emphasize the problem of safety in the pump; problem also raised the day before by Liu Qi, Deputy Director of the National Energy Board. These recent meetings followed the concern raised by the president of State Power Investment Corporation (SPIC), Wang Binghua, during the Sino-US Strategic and Economic Dialogue last June 24 in Washington.

Despite other agreements between Chinese companies and US businesses *** to create a common supply chain for the domestic and international projects, the US administration does not want any change in its relation with China. The Chinese business and political community will not have any other choice than investing more in their R&D to get rid their cumbersome American counterpart. We can already observe the raise of Chinese heavy weights such as Shenyang Blower, Shanghai Electric-KSB, and Harbin Electric with Andritz.

Dynatom

  • * The Nimitz class has two reactors of 550MWt
  • ** China, India and Russia
  • *** Lockheed Martin and State Nuclear Power Automation Systems

About Author

Arnaud Lefevre

Arnaud Lefevre is the Chief Executive Officer of Dynatom International. Arnaud is in charge of the international development of the business portfolio.