China Guangdong Nuclear Power Holding, the smaller of the nation's two dominant nuclear energy producers, has agreed to develop a large plant in Anhui province to meet growing demand for clean power in the local market and in Shanghai.
The company said it had signed a framework deal with Shanghai power and natural gas supplier Shenergy, Anhui Energy Group and Shanghai Electric Power on the project's construction in Wuhu city.
It did not give details but Anhui Commercial Daily cited Anhui Energy sources as saying the project would consist of four 1,000 megawatt generators, two in each of two phases of development.
The first phase will be 51 per cent owned by China Guangdong Nuclear, 20 per cent by Shanghai-listed Shenergy, 15 per cent by Anhui Energy Group, the parent of Shenzhen-listed power producer Anhui Wenergy and 14 per cent by Shanghai-listed utility Shanghai Electric Power.
The project will be part of China's plan to boost its nuclear power capacity to 40,000 MW by 2020 from 6,850 MW at the end of last year.
The first phase is estimated to cost 23.4 billion yuan and may come on stream in 2015, according to a preliminary feasibility study by the Anhui government. This implies a per-MW cost of US$1.5 million, about three times that of a typical coal-fired plant.
Despite high construction and depreciation expenses, fuel costs at nuclear plants are much lower, with uranium making up only 10 per cent of their operating costs compared with 60 per cent for coal-fired plants.
Half of the power to be generated by the Wuhu plant will be distributed locally, with the rest going to Shanghai as part of a programme aimed at transmitting power from energy-rich Anhui province to the densely populated Shanghai market.
Coal-rich Anhui supplies about 75 per cent of its output to neighbouring regions. As coal-fired and limited hydropower plants supply 95 per cent of China's energy needs, the country relies on nuclear power to stem growing air pollution.
China Guangdong Nuclear has signed a framework agreement to buy nuclear islands equipment from Hong Kong-listed Shanghai Electric Group for the proposed plant.
No financial details of the deal were released. The equipment will be based on CPR1000 technology, a so-called 2.5-generation technique developed by mainland engineers based on overseas second-generation technology.