CHINA said it will start manufacturing the AP1000 steam generator, a key component to be used in the world's most advanced nuclear reactors.
The Wednesday announcement of the latest milestone in China's nuclear power development came just before Premier Wen Jiabao ordered a temporarily halt in approval for new nuclear plants and said safety issues will be reviewed.
The ability to make the steam generator means that China will have the capacity to manufacture all the components of the United States-imported AP1000 reactor design, which would sharply reduce costs of building domestic nuclear plants.
Meanwhile, the China National Nuclear Corp, the country's biggest nuclear plant operator, said it will issue more bonds this year to finance the company's business expansion.
The company issued 2 billion yuan (US$203 million) of five-year notes in February and has scheduled the sale of 2 billion yuan more of the same duration in the second quarter.
Sales this year will top the record 2.5 billion yuan of notes issued in 2009.
Sun Qin, president of China National, reportedly said his company is planning to go public in 2015.
Other rivals are also trying to increase their funding sources to grab a share of China's massive nuclear power expansion plans.
China Guangdong Nuclear Power Group issued 4 billion yuan of notes in February. CNNC Nuclear Power Co, a unit of China National Nuclear, sold 2 billion yuan of five-year bonds in the same month.
So why China is so enthusiastic about nuclear power? The reasons are many.
First, compared with renewable energy sources such as offshore wind farms and solar panels, nuclear power would seem a riskier approach. But the problem with wind and solar is that they are intermittent and unable to deliver a steady source of power round the clock. There are also problems connecting them to grid systems.
Secondly, it is not only environmental concerns that are forcing China to move away from the pollution of coal-fired stations. The price of coal has been rising rapidly, making the returns from coal plants less attractive for investors.
The price for standard coal has increased more than 237 percent since 2003, while cost of electricity has grown only 20 percent because of a price cap imposed by the government.
Oil-fired stations, as an alternative to coal, haven't been helped by the skyrocketing cost of crude triggered by recent unrest in the Middle East and Libya.
Investment in coal-fired power generation dropped to 131.1 billion yuan last year from 227.1 billion yuan in 2005, according to a report by the China Electricity Council.
And thirdly, there are economic forces at work.
Many local governments have been jumping on the nuclear power bandwagon. They see nuclear plants in their domains as a boon for local economic development, bringing more investment, jobs and even prestige.
The cost of building a nuclear plant is usually shared by a local government and nuclear energy companies, generously supported by bank loans, according to a report in the 21st Century Business Herald.
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