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Friday
Dec282012

Blowing Up: The Transfer Of French Nuclear Technology To China

Technology transfers, whether on a contractual basis or through theft, have long bedeviled companies that want to benefit from China’s cheap labor and 1.3 billion consumers. Automakers, aerospace companies, technology outfits.... it’s the price they have to pay. But when it seeped out that the largely state-owned nuclear industry in France was trying to sell its secrets to China to make a deal, oh là là!

That the French have been through this with their high-speed train technology, the TGV, was hammered home on Wednesday when China opened the world’s longest high-speed rail line—1,428 miles between Beijing and Guangzhou. It extended the high-speed rail network to 5,800 miles. And the network will practically double over the next three years if government funding continues to flow. By comparison, it will take the US, or more precisely California, an unknown number of years, perhaps as many as 20, to complete the link between San Francisco and Los Angeles [California’s High-Speed Rail to Nowhere].

On the Beijing-Guangzhou line, trains will run at a maximum speed of 186 mph, specs that the TGV mastered decades ago. Initially, China struggled to develop its own technology. After it tripped badly, it decided to import some trains, and the missing technology, from Japan, Germany, and France.

They all got a piece of the pie. Alstom of France won an order for 60 sets of its latest tilt-technology trains, the Pendolino. Three were delivered fully assembled; six were delivered in kits and assembled by an entity of China National Rail; and the remainder were manufactured in China with some imported components and a lot of transferred technology. And that was mostly it for TGV sales in China. Now, China has the ability to manufacture its own trains. It’s pushing the technology to the next level. And it will become a formidable competitor anywhere in the world, even in California.

Nuclear energy—where France has also been proudly on the forefront—was going to be next. Until the scandal of massive nuclear-technology transfers broke into the open. The central figure, Henri Proglio, CEO of mega-utility EDF that owns France’s 58 active nuclear reactors but derives almost half of its revenues from outside France, has come under investigation by the Inspector General of Finance (IGF). Of particular interest: the agreement to sell nuclear and industrial secrets and know-how to China in order to conclude a deal that had been “aborted.”

On Thursday, the government announced that it would try to shed some light on the relationship between the French nuclear industry and its Chinese partners. And on Friday, it was leaked that the government, which owns 84.4% of EDF, will sack Proglio in February or March and replace him with the CEO of state-owned railroad SNCF, Guillaume Pépy, who immediately denied being “candidate for anything.” The revolving door of state-owned companies.

The intrigue goes back years. In January 2012, during the presidential campaign, a confidential agreement bubbled up, signed in Beijing on April 29, 2010, by Proglio and He Yu, the CEO of China Guangdong Nuclear Power Group (CGNPC). It envisioned a tight partnership concerning the “design” of nuclear reactors and the transfer of nuclear technologies—to the point where Chinese specialists would be associated with the construction of reactors ... in France.

The Socialists, including Jean-Marc Ayrault who would become Prime Minister, raised a ruckus: A Chinese company might soon build nuclear power plants in France? Areva, the government-owned nuclear conglomerate and crown jewel of French nuclear technology, might soon have to compete with a Chinese company for reactors in France? A shock too many for the battered “Made in France,” which had become a campaign issue.

Then, on April 19, 2012, just three days before the presidential elections, after more embarrassing details made it into the media, Finance Minister François Baroin put a hold on that contract. Turns out, apparently, EDF would hand over secrets about France’s entire stock of nuclear power plants to the Chinese. Nevertheless, in October, after the storm had settled, EDF, Areva, and CGNPC signed a contract. It remains confidential. Nothing has leaked out.

The unions were particularly worried. They demanded transparency concerning the technology transfers. They feared the effects on employment in the nuclear energy industry. They feared that much of it might shift to China.

Now, the government might be having second thoughts. The IGF is intensely interested in the first agreement between EDF and CGNPC that defined a partnership whose goal it was to build nuclear power plants together. The plants would be equipped with a new reactor type, the latest and greatest alternative to the catastrophically over-budget and now stalled European Pressurized Reactor (EPR) that Areva had been pushing for years. That EDF, which was mostly government-owned, could even envision a deal that would hurt Areva, which was wholly government-owned, was simply too galling.

Simultaneously, there was another fight in France. A tiny street-theater company decided to attack an evil American multinational giant. But there are complications: political connections, government subsidies, Coca-Cola commercialism, perhaps world domination, and awesome art. Read.... French Artists Strike Out Against Evil American Empire.

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Reader Comments (6)

The Made in America flip side of the story---.

Way back in the dawn of the civilian nuclear industry a single individual, Alvin Weinburg, drew up the basic designs for two types of nuclear power reactors for electrical power generation. As head of the Oakridge National Laboratory, he oversaw the design and testing of a liquid fluoride thorium reactor (LFTR) that ran successfully for four years. The alternative design that was chosen as the world standard instead uses uranium as a fuel and highly pressurized water for cooling. It requires constant active cooling water under extreme pressure that always operates perfectly, therefore multiple redundant back up systems must be built into the designs.. Since these reactors are operated by humans they fail from time to time, and because they are so expensive to build the world is still relying upon insanely stupid 40 year old design flaws like the spent fuel storage pools built on top of the Fukishima reactors.

The LFTR design uses a much more common fuel source, produces only 5% of the waste volume and that consisting of isotopes with short half lives, and automatically and passively shuts itself down with no operator input, back-up systems or power. However it has one fatal flaw that caused it to be abandoned in the contest with light water conventional uranium reactors. The end products of the LFTR reactor operation are not very useful for building bombs, so the design was of no interest to the Nuclear Navy and the Imperial Army.

Now for the Chinese side of the story. Seems that a high level group of scientists were being given the VIP tour of Oak Ridge, shown the multi-junction solar cell research etc. When they were asked if there was anything else they were interested in, the chairman of the delegation (who just happened to be China's leading nuclear scientist) said "what I'm really more interested in is the data on the LFTR experiment. Since nobody at Oak Ridge had bothered for decades to open the dusty old file cabinets filled with data that had no career reward possibilities, the Chinese delegation were told to help themselves.

LFTR technology is simply the only nuclear energy path on the horizon that can potentially replace coal as the primary base load electrical energy source. Since it has never been fully developed, serious problems remain to be solved before it is commercialized. And guess which country is seriously working on solving those problems and will end up owning the intellectual property rights to the majority of the world's power plants?
December 28, 2012 | Unregistered CommenterThor's Hammer
Thor, you assume that they will be able find the answers and that there will actually be time and resources to make use of the info it it is possible. I doubt both. The financial system of the world is balancing on the knife edge. Resources are disappearing faster and faster daily. Climates are changing and may be even more important to humans than either of the first two items. And if the do overcome the extreme odds, so what? The West will be dead by then anyway.
December 29, 2012 | Unregistered CommenterMakati1
Actually I make no such assumptions. Individually humans are capable of incredible brilliance. Socially there is only occasional evidence that they are smarter than lemmings. LFTR reactors probably can be produced by the thousands on an assembly line just like passenger airplanes, and at a cost that is dwarfed by current useless military expenditures. The nuclear waste produced by such proliferation may only remain dangerous for 300 years instead of 10,000 like plutonium, but thus far humans have not proven that they are capable of accepting even that reduced responsibility.

Energy is indeed the key currency of industrial civilization, but an endless supply of cheap energy does not imply that the civilization that results will be a good steward of our finite planet.
December 29, 2012 | Unregistered CommenterThor's Hammer
At this moment the PIIGS are suffering from their new competitors from EMs (and eastern Europe). That is a big part of their problems.

But this post indicate that the next part of the rich world (aka us) is not too far from becoming under attack as well.
The new competition being the same: China and Co, may be only another part of the country or their peoples.
They are not too far from making the same stuff the West has been able to finance its high standards of living with (basically largely pricing power on stuff other less developed countries were not able to make).
And there is little choice. This nuclear deal:
-do it this way; or
-do it not and have your Western competition doing it and you end up with cheap Chines competition anyway.
Do a technology transfer, or do it not (and they steal your IPR and know how anyway).

With as added problem that imho the West in these kind of sectors are not really very efficient. Often even on that point Chines are able to make improvements (next to their lower wages of course).
December 30, 2012 | Unregistered CommenterRik
There is an even more interesting back story to this. The French reactors are based on Westinghouse designs from the US. The french obtained the technology by dangling promises of big sells in France if the US would "share" the technology. Now Areva is one of Westinghouse's biggest competitors. It is all a trade-off for short-term benefits (near term sales) at the expense of long-term benefits.

And to finish the cycle, Westinghouse now has to compete with both Areva and China. Of course, Westinghouse and Areva are both tripping over each other trying to transfer all of their technology to China so they can book a couple of reactor sales. China will then use the technology to build 100's of plants themselves.
December 31, 2012 | Unregistered CommenterAltnuc
Altnuc - well said!
January 1, 2013 | Registered CommenterWolf Richter

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