Nuclear power on cusp of major boom in China

Proponents argue its cleaner and greener, yet nuclear power remains one of the most controversial energy sources in many parts of the world.

China though, is not waiting around for a debate.

China’s State Council approved six new reactors for construction last week, and now a new report by S&P Global Ratings has found Nuclear is set to become one of the most critical elements in the country’s transition away from fossil fuels.

The Transition Needs Will Energize China’s Nuclear Power Sector report, published earlier today, predicts a further acceleration of the nuclear power industry in China in the coming years.

“We expect the country will construct six to eight new reactors annually over the next few years. The Russia-Ukraine conflict has put nuclear power back in the spotlight in terms of energy security in Europe,” said S&P Global Ratings credit analyst Yuehao Wu.

Fundamentals shows nuclear power industry is primed for expansion

Half of the reactors currently under construction in China are projects started since 2020, with cash flows from new capacity emerging in the short-medium term expected to help the country’s key nuclear-power companies handle further large spending needs.

S&P project annual investments of more than US$15 billion up until 2025 by the three traditional nuclear operators:

  • China General Nuclear Power Corp.
  • China National Nuclear Corp., and
  • State Power Investment Corp.

A fourth nuclear power operator, China Huaneng Group Co., is also expected to embark on major nuclear power development plans in the coming months, after the central government extended a fourth nuclear operating license.

This expansion comes at a time when China is trading more of its electricity in open energy markets. While this potentially adds tariff uncertainty for energy producers, it will aid in attracting capital for new developments.

Decarbonization the main-game

China’s decarbonization and self-sufficiency goals are central to the nuclear industry’s expected growth, according the the Report.

“We estimate the country’s emissions of carbon dioxide (CO2) would have been 305 million tons higher last year, without nuclear power. By 2035, nuclear could help to save annual emissions by 840 million tons,” said Ms. Wu

S&P Global Commodity Insights data shows operational nuclear power capacity in China is expected to grow to 67 gigawatts (GW) by 2025, 105GW by 2030 and 145GW by 2035.

This growth implies over 7% annual capacity growth for the next 15 years.

Other Asian nations not as bullish on nuclear

While China is unwavering its nuclear power ambition, other Asian nations continue to be far more hesitant to embrace new nuclear power technology.

This is mostly due to the memory of Japan’s Fukushima disaster in 2011.

Ms. Wu says, “a lack of social support, wavering political stances, affordability, and cost efficiency are creating more uncertainty for nuclear power in Japan, Korea, and India.”

Recent nuclear power developments in China were examined in this Asia Markets article.