"There are strong signals from the government that encourage the nuke power sector. The sudden power shortage was the trigger," said Liu Changxin, deputy secretary general with the Chinese Nuclear Society (CNS).

The expansion would boost the share of nuclear energy in China's power mix to six percent in 2020 from 1.4 percent last year, sharply below wealthy nations' average of 30 percent.

In early 2003, nuclear power was officially listed for the first time in the national power sector development plan and placed under the direct charge of China's super ministry, the State Development and Reform Commission, experts said.

China runs 6,200 MW at eight nuclear generators all in the east coast and is building another three, which would bring total capacity to 8,800 MW by the end of 2005.

The country's electricity demand surged at a sizzling 15.4 percent last year to 1.89 trillion kilowatt hours, driven by 9.1 percent economic growth, stretching the supply system and plunging 22 out of 31 provinces into brown-outs.

Demand is set to expand about 11 percent this year. Analysts estimate China's power demand would grow at an annual average of 4.3 percent between 2001 and 2025, the fastest in the world.

SHORTAGES TO WORSEN

State media said shortages would worsen this year and supplies would not catch up with demand for another two years.

This prompted Beijing to rethink its strategies to grow its power market, the world's second largest, after the United States, and divert energy sources from coal, which fires three-quarters of the 384,500-MW installed capacity.

Beijing is evaluating proposals to build four 1,000 MW plants costing an estimated $6 billion in east China's Zhejiang and Guangdong province, but no time frame has been set. Each kilowatt of capacity could cost around $1,600, an industry source said.

China financed most of the existing plants via international bank loans based on guarantees from the governments of foreign suppliers. Future projects are likely to seek more diverse funding, including corporate bonds and foreign stake holdings, Liu from CNS said.

Hong Kong's largest power utility, CLP Holdings Ltd (0002.HK: Quote, Profile, Research) , is so far the only firm outside mainland China that owns a 25 percent stake in the 2,000-MW Daya Bay nuclear power plant.

The pace of future developments, however, could be slowed by a debate over where China should source its nuclear power technologies.

"The argument is over whether China should leap to the most advanced technology from the U.S., or the less advanced French know-how which dominates the existing reactors and of which China has had a firm grasp," Liu said.

He said Pittsburgh-based Westinghouse Electric Co, owned by British Nuclear Fuels Ltd, was among the interested suppliers.

China would have to wait at least two to three years before the most advanced technology from the United States is transferred to it, he said.

China imported eight of its 11 existing and planned reactors. Suppliers include France's Framatome and Electricite de France, Atomic Energy of Canada Ltd as well as from Russia.

Industry experts said China's inland provinces such as Hunan, Hubei and Sichun aimed to have new nuclear power plants and boost supplies to help attract investments and boost tax revenues.

They shrugged off worries over nuclear safety, citing its tiny share in the country's power mix and stringent safety measures set in plant designs.

"We have excessive concerns over nuclear safety. People have beach vacations in Japan and France where many nuclear plants are located nearby," said an official with state-owned China National Nuclear Corp.