Private firms set to benefit from nuclear power investments

Private firms set to benefit from nuclear power investments
by Simon Mansfield
Sydney, Australia (SPX) Oct 09, 2024

The Chinese government has approved five major nuclear power projects, each of which allocates 10 percent of shares to private investors. This move highlights the government's commitment to fostering private enterprise growth and promoting sustainable development, according to industry experts.

These nuclear power initiatives, with a combined investment of over 240 billion yuan ($34.20 billion), have opened opportunities for private capital, which accounts for 10 percent of the funding. This is expected to provide a significant boost to the development of private enterprises, experts said.

One of the key projects, the Jiangsu Xuwei nuclear power heating plant, stands out as the world's first to combine high-temperature gas-cooled reactors with pressurized water reactors. The plant, operated by China National Nuclear Power Co Ltd, is among the five recently approved projects.

Ling Zhongguo, deputy director of the Bureau of Private Economy under the National Development and Reform Commission, noted that 10 private enterprises have committed 4.5 billion yuan in capital toward these projects. This contribution is projected to stimulate an additional 24 billion yuan in private investments.

Jin Xiandong, director of the policy studies office at the National Development and Reform Commission, emphasized that this initiative aims to broaden opportunities for private enterprises and spur greater private investment. He added that further efforts will focus on improving conditions and eliminating entry barriers, encouraging private capital to engage in large-scale projects, including nuclear power and railways.

Nuclear power projects, while requiring substantial upfront investment and long construction timelines, offer stable returns for decades once operational, the commission explained. For instance, the Daya Bay Nuclear Power Plant in Shenzhen has generated over 433.49 billion kilowatt-hours of electricity since its first units began operations in 1994.

Amid China's push for a green energy transition, the nation's nuclear power capacity is poised for steady growth, said Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University. Investing in nuclear power not only yields long-term returns but also fosters technological innovation and collaboration within the industry.

According to the 14th Five-Year Plan (2021-25) for a modern energy system, China's installed nuclear power capacity is projected to reach around 70 million kilowatts by 2025. Looking ahead, Zhang Tingke, vice-chairman of the China Nuclear Energy Association, said nuclear power is expected to comprise about 10 percent of China's total power generation by 2035, a figure in line with the global average. This share could rise to 18 percent by 2060, similar to the levels seen in OECD countries.

Currently, nuclear power accounts for less than 5 percent of China's electricity generation, indicating considerable potential for expansion, according to data from the association.

The National Energy Administration has noted that private enterprises have long played an important role in nuclear power research and development, as well as supply chain support. Over the past decade, dozens of private companies have received national backing for nuclear projects, with 19 private firms leading significant research endeavors supported by approximately 150 million yuan in government funding.

As the sector evolves, many specialized private firms have emerged, overcoming technical challenges to become integral players in China's nuclear power industry chain.