Event: on April 20, Premier Li Keqiang held a national standing committee meeting and proposed the orderly development of nuclear power under the premise of strict supervision and ensuring absolute safety. After years of preparation and comprehensive evaluation and review, three new nuclear power unit projects in Sanmen, Zhejiang, Haiyang, Shandong and Lufeng, Guangdong have been approved.
The installed capacity of the approved unit project is about 7.4 million KW, which is expected to be put into operation in 2027
The projects approved by the national standing committee are Sanmen Nuclear Power Phase II (China Nuclear Power Group), Haiyang nuclear power phase II (state power investment) using domestic cap1000 technology and Lufeng nuclear power units 5 and 6 (China Guangdong Nuclear Power Group) using Hualong No. 1 technology, with a total installed capacity of about 7.4 million kW (4 125 + 2 120).
It usually takes five years for a nuclear power plant to be put into operation. The approved project is expected to be put into operation in 2027.
The scale of nuclear power under construction in China is about 17.88 million KW, and 6-8 units are expected to be approved every year during the 14th Five Year Plan period
As of April 20, 2022, China has 53 nuclear power units in operation, with a corresponding installed capacity of 54.64 million KW, 17 units under construction, with a corresponding installed capacity of 17.88 million KW. With the 6 units approved this time, the scale under construction has reached 25.28 million KW. According to the modern energy system planning of the 14th five year plan, the installed capacity of China National Nuclear Power Co.Ltd(601985) operation will reach about 70 million KW by 2025. Therefore, it is expected that about 15 million KW nuclear power units will be put into operation in China in the next four years. At the China Nuclear Energy Sustainable Development Forum held last year, relevant institutions predicted that the scale of nuclear power under construction in China will reach 40 million kilowatts by the end of the 14th five year plan, which means that China needs to approve 6-8 units per year in the next three years. (details of nuclear power units in operation and under construction are attached at the end of the text)
Under the dual carbon target, nuclear power has become the best choice of base load energy, and the industry is expected to achieve long-term steady growth
In order to achieve the goal of double carbon, thermal power will be gradually transformed into auxiliary power supply, while wind power supply is difficult to fully assume the responsibility of main power supply due to its own characteristics. In this context, nuclear power with clean, stable output and extremely high utilization hours has become the best base load energy choice, and the proportion of nuclear power generation has great room for improvement. At the same time, the role of high investment, long cycle and long industrial chain of large-scale nuclear power projects on steady growth and the change of attitude towards nuclear power in major European countries are conducive to the future development of the industry.
We believe that the highly domestic nuclear power industry will usher in a good opportunity for development in the next 10-15 years, and the industry is expected to achieve long-term steady growth.
Investment suggestion: in the context of double carbon, the nuclear power industry ushers in a good opportunity for development, the industry is expected to grow steadily in the long term, and the whole industrial chain is expected to benefit. Recommended targets: Cgn Power Co.Ltd(003816) (leading nuclear power operation, and the installed capacity is expected to grow steadily), Jiangsu Shentong Valve Co.Ltd(002438) (leading nuclear grade special valves, deeply participating in the spent fuel reprocessing market), related targets: China National Nuclear Power Co.Ltd(601985) (the installed capacity of nuclear power increases steadily, and the rapid development of new energy brings the second growth point).
