(Beijing) — China has never suffered a Three Mile Island-like nuclear power plant accident, much less a Chernobyl meltdown or a Fukushima disaster.
But now that the government under Premier Li Keqiang has put the country on a fast-track for nuclear power development, with dozens of new reactors scheduled to launch by 2020, the insurance industry is focusing attention on the difficult question “what if?”
China’s limited liability insurance system stands in sharp contrast to the unlimited liability coverage that protects the public in Germany, Switzerland, Japan, Belgium, Russia and the United States.
All other countries with nuclear power around the world, including Britain and Spain, have a limited liability system like China’s.
The Chinese insurance pool’s direct underwriting capacity is a respectable US$ 898 million, behind only Japan, Britain and Switzerland. In terms of compensation caps, Belgium has the highest at US$ 1.5 billion, followed by Japan and Switzerland at US$ 1.2 billion each.
In China, a lot more money would be needed to cover damage in the event of a major catastrophe.
“If there’s ever a problem, this liability limit will certainly be too low,” said Liu Yubo, CNIP’s deputy general manager.
The price tag for the 2011 Fukushima accident in Japan has been estimated at US$ 64 billion, while the cleanup alone after the Three Mile Island incident in the United States in 1979 cost about US$ 1 billion.