China will not start construction of any new nuclear power plants during the next three years according to Shen Wenquan, director of the Nuclear Power Department of the China Nuclear Power Corp.

The decision was prompted by decreasing demand for electricity as a result of the Asian financial crisis. There has been undercapacity at a number of state-owned enterprises which has exacerbated the depressed demand, Shen admitted.

In addition, low electricity prices are hampering nuclear development. China relies heavily on foreign suppliers for its nuclear power plant technology. This has pushed up the cost of nuclear power in relation to thermal and hydropower, making it uncompetitive.

Over the next three years China intends to concentrate on upgrading power grids and reducing the number of small thermal plants that operate with low efficiency and generate large amounts of pollution. For the long term, however, Shen said the potential market for nuclear power in China remained large.