In eastern Shandong province on the shores of the Yellow Sea a small nuclear power plant is under development. Built by China Huaneng Group, the country's leading power generator, it uses different technology from all other nuclear projects in the country.

What seets apart this plant, located in the city of Rongcheng, is its high-temperature gas-cooled technology, in which China, along with the United States and South Africa, is a world leader in its development.

Compared with conventional technology, nuclear reactors using the technology are safer, more efficient and more simply designed, analysts said.

Construction of the plant, which is designed to have one 200-mW-reactor in the first phase, will start in September this year. It is scheduled to start operations in 2013.

The project is Huaneng's first in nuclear power. It earlier signed deals with suppliers to equip its plant, including Tsinghua University, China Nuclear Engineering Group Co, Shanghai Electric and Harbin Power Equipment Corp.

The great opportunities that exist for China's nuclear power industry encouraged more domestic power companies to join in. Along with Huaneng, power companies such as China Power Investment Corp and China Guodian Corp have all started their own nuclear projects.

China Power Investment, one of the country's five leading power-generating companies, said earlier it would accelerate preparations for two nuclear power projects in Hunan and Guangxi.

The company signed an agreement with the Hunan provincial government in January, under which both parties will further boost their preparatory work on the construction of the Xiaomoshan nuclear project in Yueyang, involving an investment of around 60 billion yuan.

Its second nuclear power plant will be located in Pingnan in Guangxi Zhuang autonomous region. Local media reported that total investment in the Guangxi project is expected to reach 50 billion yuan.

The Hunan and Guangxi plants, which have yet to be approved by the central government, are likely be China's first inland nuclear projects, said an official with China Power Investment who asked not to be named.

Guodian, another of the country's top five power producers, has launched its first nuclear project in eastern Fujian province. It has set up a division to work on the project in Zhangzhou, a coastal city in the southeast of Fujian.

The project is still at an early stage and has yet to receive government approval, said an official from the company.

Analysts said that nuclear power would become the next hotspot for China's power companies, as it has lots of advantages over traditional power generation methods.

"Compared with thermal power and hydropower, nuclear power has no problems in terms of fuel supply, and is little affected by the climate," said Xue Jing, an executive with China Electricity Council.

Development of the clean energy is also in line with China's efforts in emission control and environmental protection, she said.

China's power companies can use nuclear power as an effective way to diversity their business structure, she said.

High coal prices greatly eroded power companies' earnings last year. The country's top five power companies all saw losses in their power generation business in 2008.

Due to sharp disagreements over coal prices this year, leading power companies have so far not signed the annual coal supply contract.

Coal currently accounts for over 70 percent of China's power generation, whth nuclear power only accounting for around 1 percent. "The industry has great potential," said Xue.