New Chinese-funded nuclear plants ‘no cause for alarm’ says Argentine government

Argentina looks to advance Chinese-funded nuclear plants amid fears over costs and safety

Last month, Argentina added 720MW of energy capacity to its national grid as the Atucha II power plant in Buenos Aires province became fully operational.

Thanks to Chinese loans, construction of Atucha III, the first of two new nuclear power plants which will have a combined installed capacity of 1700MW, will begin later this year. Power from the new plants will double the share of nuclear power in Argentina’s energy mix from around 5% to 10%.

But inconsistencies in announcements about the project by the Argentine government has led to concerns over safety and the impacts of the terms of the deal on local manufacturing and labour. President Cristina Kirchner has had to move to allay fears that Chinese workers would be brought in for the project and claimed that only materials not manufactured domestically would be imported from China.

With the deal already announced as a fait accompli, environmentalists are decrying the lack of a formal consultation process; “by law, an environmental impact study and a public hearing are required before starting any project. Neither was done,” said Raul Montenegro, president of the Foundation for Environmental Protection (FUNAM).

Years in the making

The expansion of Argentina’s nuclear power stations was approved by Congress in 2009 to meet growing energy demand in a country that since 2003 (and until recently) has been growing an average of 5% per year. Even after overcoming its financial meltdown in 2001, which led to a moratorium on foreign debt, Argentina still has outstanding accounts with creditors and, consequently, had limited access to international financial markets.

China has emerged as an ideal partner for financing major infrastructure projects. Chinese President Xi Jinping visited Buenos Aires in July 2014 and received Cristina Kirchner in Beijing in February. Together they signed a raft of agreements, ushering in a “full strategic partnership” between the two countries, which, among other provides Chinese loans to renovate the railway network and construct a hydroelectric complex.

Argentina already has three nuclear power plants: Atucha I and Atucha II (in the province of Buenos Aires, 110 km from the capital) and Embalse (in Córdoba province). Until last month, only two were functioning. Construction of Atucha II began in the 1980s, but the project was abandoned as fears about nuclear energy proliferated after the Chernobyl disaster.

China’s emergence as a creditor has revived the project but this has sparked fears among Argentina’s manufacturing sector, which Kirchner has played down. “No one should be alarmed,” said the president at the inauguration ceremony, “because at the first plant, 70% of production is domestic and 30% foreign.” The Chinese share in the second reactor, will be greater: 50%. In return, they will transfer new technologies to Argentina. China National Nuclear Corporation (CNNC) will supply the reactors and other components not manufactured domestically.

Addressing energy diversity and public fears

Kirchner also cited climate change in explaining her decision to invest in nuclear power and thereby diversify energy sources, “look what is happening to our brothers in Brazil, which has a grid mostly based on hydroelectric power,” she said. Drought in Brazil has caused energy shortages because of the country’s reliance on hydropower.

But Montenegro believes that a volatile climate and a volatile political order are precisely the reasons that Argentina should not be investing in such “risky technology.”

Experts from the Argentinean Nuclear Regulatory Authority (ARN), the agency responsible for assessing the viability of nuclear power plants, say this sector is one of the most transparent in the world. When the Fukushima accident occurred in Japan in 2011, all the data was published and experts from various countries worked together with the Japanese to try to solve the problem, they added.

The same, they argue, does not happen when there is an oil spill, which is the responsibility of a private company.

The ARN has confirmed that environmental impact studies for the two new plants have not been presented, and public hearings have not been held. But the agency stated that all legal requirements will be met, because without them the operation of the two new reactors will not be authorized, and the funds involved in the projects will have been wasted.

Montenegro insists the government is contradicting itself. In an interview with Argentine newspaper Pagina 12, the president of Nucleoeléctrica Argentina SA (NASA), Jose Luis Antunez, said that the location for the plants has not yet been established, but that work on the first plant will begin later this year. According to Montenegro, the ARN must accept his company’s proposal to build Atucha III next to Atucha I and II.

“It is likely this will happen, because the political cost of installing a nuclear power plant where others already exist will be less. The local population is already accustomed to living with nuclear reactors,” said Montenegro, who also warned that it is risky to concentrate so many plants in one place.

Additionally, says Montenegro, the evaluation process is clearly not following best practice. “In the United States, a study like this takes at least 10 to 12 years, because it is complex. How can everything be ready in a few months?”

Montenegro and opposition politicians also questioned Cristina Kirchner’s decision to become indebted to China as she enters the final stages of her second presidential term. Kirchner has served two successive terms and cannot run in the October elections under the Argentine constitution so it will be up to her successor to honour agreements with China. But just how much they will need to repay remains unclear.

President Kirchner announced that the first of the two new plants would cost US$ 5.8bn, with Antunez saying that 30% (US$ 1.7bn) would cover manufactured components from China. But according to Antunez’s calculations, a US$ 2bn loan will be required.

China was chosen as a partner because, unlike other nations, it has experience in this industry, the Argentine government said. “This country (China) is building the most nuclear reactors on the planet: 28 nuclear reactors at the same time,” Antunez said. The president of NASA also dismissed the “absurd rumors” that China would ‘invade’ the Argentine market with parts and Chinese workers. “We will only import what we do not produce here,” stated Antunez.

This argument does not convince Montenegro; “China is a dangerous partner: it has first-world technology with fourth-world wages, and a very recent environmental protection policy,” he said, adding that he is waiting to see the environmental impact studies before taking any action.

Chinese nuclear manufacturers were criticised in the wake of Fukushima for not addressing public fears about the safety of their own plants. In addition to a thorough environmental evaluation, better public relations are needed if they, along with the Argentine government, are to avoid similar problems here.