In the great era of green electricity infrastructure, nuclear power will take off again



1 The present and future of nuclear power

1.1 The fundamentals of nuclear power are improving

The number of new nuclear power projects approved in 2022 exceeded expectations, and the position of nuclear power as the main force of energy supply was stable. The executive meetings of The State Council held on April 20 and September 13, 2022 pointed out that nuclear power should be developed in an orderly manner under the premise of strict supervision and ensuring absolute safety. Five new nuclear power plant projects that have been comprehensively evaluated and reviewed and have been included in the state plan, and a total of 10 units were approved. We believe that the nuclear power inflection point signal has appeared, and multiple dimensions have established the basis for the development of advantages.

Tianshi: The policy is oriented well, and the general direction of actively developing nuclear power is established. In the 2021 government Work report, it is clearly proposed to "actively and orderly develop nuclear power under the premise of ensuring safety", which is the first time since 2017 that the government work report uses "positive" to mention nuclear power. After that, a series of policy documents clarified the important position of nuclear power in "carbon neutrality", especially in the two important documents of "Action Plan for carbon Peak before 2030" and "14th Five-Year Plan for Modern Energy System", which once again emphasized the "positive and safe and orderly development of nuclear power".

Geographical location: China has a vast territory, there is a mismatch between power generation and power consumption, nuclear power as a base load energy at the same time with green electricity attributes, open the long-term development of nuclear power space. In the process of accelerating the realization of the dual carbon goal, there are problems such as abandoning wind and light, long-distance transmission, and impact on the power grid caused by the increase in the proportion of new energy, and the power shortage caused by the thermal power decline, which requires long-term sustained investment in UHV, energy storage, distribution network and other fields to solve these problems. Because nuclear power is the only power generation method with the stability of traditional energy and the cleanliness of new energy, it has become the best choice to solve the current energy problems. The power shortage occurred in the summer and autumn of 2021 and 2022 for two consecutive years, which proves that energy supply and clean are equally important, and nuclear power has become an ideal alternative energy because it has the attributes of green electricity and stability at the same time, and has received strong support from the policy side.

Renhe: At present, the fund holdings of companies in the nuclear power sector are still at the bottom, and the company's valuation is also at a historical low. We selected some companies in the nuclear power sector to observe the proportion of fund holdings, and found that after the collective increase after 2019, it has shown a downward trend since 2021, and is currently at a historical low. From the perspective of the valuation of companies in the nuclear power sector, it has been in a slow decline in recent years and is currently at a historical low. We believe that with the support of the above "favorable conditions, geographical conditions and people" factors, the nuclear power plate has a large upward space.

1.2 Technology leapfrogs to the fourth generation to significantly improve security

After more than half a century of development since the commissioning of Shippingport, the world's first commercial nuclear power plant, in 1957, The 422 nuclear power units in operation (statistics by the end of 2022 of the CNNC Strategic Planning Research Institute) include boiling water reactor (BWR), pressurized water reactor (PWR), heavy water reactor (PHWR), water-cooled graphite reactor (LWGR), fast reactor (BWR), high temperature gas cooled reactor (GCR) and other reactors. Nuclear power technology is characterized by diversification and continuous improvement of safety. As a late entrant in the field of nuclear power, China has fully mastered the third and fourth generation nuclear power technology through introduction, absorption and independent research and development, and has reached the world's leading level of nuclear power.

Before 2000, the global mainstream was dominated by second-generation nuclear power technology, with the highest proportion of pressurized water reactors. During this period, after 30 years of nuclear power design and construction work, China has completed the whole process of "introduction - digestion - absorption - re-innovation", and has developed second-generation nuclear power technology with independent intellectual property rights. The Qinshan Phase I CNP300 is the first nuclear power unit designed, built and operated by China. On this basis, CNPC launched CNP650 and applied it in Qinshan Phase II, Hainan Changjiang, Pakistan Qasima and other projects. Based on the French Famatong M310 unit, CGN launched the CPR1000 and applied to Lingao, Hongyanhe, Ningde, Yangjiang, Fangchenggang and other projects, while CNN launched the second-generation improved M310+ and applied to Fuqing, Fangjiashan, Tianwan and other projects. Through mass construction, the second-generation nuclear power project has created a complete, mature and efficient nuclear power supply chain, laying the foundation for the development of the nuclear industry. And by continuously reducing costs and optimizing construction period, the competitiveness of nuclear power is continuously improved.

In order to improve the safety and economy of nuclear power, the third generation of nuclear power has gradually taken the center stage of nuclear power since 2000. China is a "latecomer" in the sense of the word, but with policy support and a mature nuclear industry system, it successfully achieved a curve overtaking, and created a national brand such as the independent three-generation nuclear power technology "Hualong One". The world's first nuclear reactors of AP1000, EPR and Hualong One are located in China, and China's CAP1400 and Hualong One, which have independent intellectual property rights, will open the world nuclear power market as the trump card of nuclear power "going out" in the future. Compared with the second generation of nuclear power technology, the unit life has been extended from 40 years to 60 years, the refuelling cycle has been extended from 12 months to 18-24 months, and the single reactor power has been increased to reduce the unit investment, which has greatly improved the economy of nuclear power.

With the evolution and development of nuclear energy technology, the International nuclear energy community has put forward higher requirements for nuclear power technology, and in July 2001, the fourth Generation of nuclear energy system International Forum (GIF) was established and put forward the fourth generation of nuclear power technology concept. At the end of 2002, GIF and the US Department of Energy jointly issued the "fourth generation Nuclear Energy system Technology Roadmap", selecting six types of gas cooled fast reactor, lead cooled fast reactor, molten salt reactor, sodium cooled fast reactor, supercritical water cooled reactor, ultra-high temperature gas cooled reactor, as the focus of future international cooperation research of GIF. On the road of four generations of nuclear power development, China has once again reached the forefront of the world. The fourth-generation nuclear power technology has the characteristics of minimizing nuclear waste, greatly improving safety, improving economy, and preventing nuclear proliferation, and aims to reach the level of practical use by 2030, which will have a revolutionary impact on the nuclear power industry and the entire energy industry. The high-temperature gas-cooled reactor, developed by the Institute of Nuclear Energy and New Energy Technology of Tsinghua University, has started construction of the first demonstration power station in Shidaowan, Shandong Province, which has inherent safety without traditional risks such as core melting under the most serious accident. The fast reactor, developed by the China Institute of Atomic Energy, can increase the utilization rate of uranium resources to more than 60% by forming a closed cycle of nuclear fuel, while minimizing the generation of nuclear waste and minimizing radioactive waste. The China Experimental Fast Reactor has been successfully completed, and the Fujian Xiapu Fast Reactor demonstration project began construction in December 2017.

After more than 30 years of development, China's nuclear power industry has caught up with the world's advanced technology and scale. In the future, the safety, economy and low-carbon requirements of nuclear power will continue to increase, and will be widely involved in international cooperation and competition, we believe that with a complete and efficient supply chain, as well as a strong design and development capability, China's nuclear power industry will continue to progress, and will break through the nuclear fusion, nuclear fuel reprocessing and other higher barriers.

2 High-quality power supply attributes promote the positive development of nuclear power

2.1 Outstanding economy of nuclear power

The initial construction investment of nuclear power projects is high, but the competitiveness of nuclear power projects is prominent after considering the whole life cycle cost after operation, fuel and waste disposal costs. Even if the cost of the third generation of nuclear power increases, its economy is still very strong. Moreover, the design life of domestic nuclear power has a margin of 40-60 years, and it will generally apply for a life extension of 20 years after the expiration, further enhancing the profitability of nuclear power. Using the levelized power cost LCOE to evaluate, according to the IEA calculation, in 2021, China's pressurized water reactor nuclear power plant LCOE is about 65 US dollars /MWh, second only to photovoltaic US $35 /MWh and land wind US $45 /MWh, and has an advantage over coal power. As a base load energy, considering long-term operating costs, it has a strong substitution ability for thermal power and gas power generation from the cost side.

2.2 Outstanding green electricity attribute of nuclear power

From the perspective of carbon emission level, environmental friendliness, and the promotion of energy conservation and emission reduction in other related industries, nuclear power is well-deserved green electricity.

Nuclear power itself has the advantage of low carbon emissions. From the perspective of the whole life cycle, according to the United Nations Intergovernmental Panel on Climate Change (IPCC) estimates that nuclear power brings normalized carbon emissions of only 12g CO2, its greenhouse gas emissions are the same as wind power, and almost lower than all other energy sources.

Nuclear power does not pollute the surrounding environment. During operation, the nuclear power plant does not emit SO2, CO2, PM2.5, nitrogen oxides and other gases and particles that will cause pollution to the environment. At the same time, nuclear power plants have a complete radiation protection system, and the monitoring results of China's nuclear power plants in 2022 show that the operation of nuclear power plants has not caused significant changes in radiation dose, and has not adversely affected the surrounding environment of nuclear power plants. In 2022, the cumulative power generation of nuclear power units in operation in China will reach 417.786 billion kWh, an increase of 2.52% over the same period. Compared with coal-fired power generation, nuclear power generation is equivalent to reducing the burning of standard coal by 118 million tons, reducing the emission of carbon dioxide by 309 million tons, sulfur dioxide by 1 million tons, and nitrogen oxide by 870,000 tons. A million kW nuclear power unit can reduce CO2 emissions by about 6 million tons per year compared to the same power coal-fired unit.

Nuclear power generation side double carbon landing. In November 2021, nearly 200 countries signed the Glasgow Climate Convention at the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP26), agreeing to reduce global greenhouse gas emissions by 45% by 2030 and committing to phase out coal use. Reduce subsidies for fossil fuels. Nuclear power helps to enhance the stability of power grid operation and promote the deployment of new energy sources such as wind power and photovoltaic.

Nuclear power can help other industries cut carbon. In addition to power supply, nuclear energy can also be used for district heating, industrial heating, desalination, hydrogen production, synthetic fuels, etc., helping to promote the decarbonization of sectors other than electricity that are difficult to reduce emissions. In 2022, the heating projects of Haiyang, Hongyanhe, Shidao Bay, Qinshan and other units have been started and put into official operation, which is expected to continue heating and steam supply for the factory and surrounding industrial enterprises in the future, and contribute to environmental protection and energy conservation and emission reduction.

2.3 Supply assurance capacity to improve the rigid demand attributes of nuclear power

Nuclear power is the only power generation method with both baseload power and clean energy properties. Base load energy refers to the main power source that can provide continuous and reliable power supply, such as coal power and nuclear power. Nuclear power clean, low carbon, high energy density, good economy, not affected by seasonal and climate factors, in addition to short refuelling overhaul, can be long-term stable operation at rated power, to meet the base load power supply reliable, economic, adequate and clean four requirements, is the best choice to replace fossil energy base load power supply. Nuclear power peaking and power reduction operations will also increase safety risks and environmental protection and fuel handling costs. Uranium resources for the manufacture of nuclear fuel are national strategic resources. Reduced power operation and shutdown will directly lead to the discharge of nuclear fuel without full utilization, which will not only waste uranium resources, but also increase the difficulty and cost of nuclear power plant operation and spent fuel reprocessing. Mature power systems have adopted nuclear power as base load energy. According to the statistics of German public power load in the 8th week of 2023 by Energy Charts, within 168 hours of the whole week, wind power and photovoltaic output were unstable, thermal power responded to peak load according to demand, but its domestic nuclear power generation power has been maintained at about 2980MW.

The stable supply of electricity is an important guarantee for economic development, and the stable output attribute of nuclear power has been paid attention to. Since the second half of 2021, the high price of domestic power coal and the difficult transmission of costs have led to a shortage of supply of thermal power plants, a sharp decline in regional new energy output during overlapping parts of the period, and the situation of "power rationing" in many parts of the country. According to the Barometer of the Completion of dual-Control Energy consumption Targets in various Regions in the first half of 2021 issued by the National Development and Reform Commission, 12 regions, including Guangdong, Fujian, Yunnan, Jiangsu and Zhejiang, showed a grim situation in terms of energy consumption reduction and total energy consumption. In order to complete the "double control" task, some provinces began to take the fastest measures such as power limiting, limiting production, aluminum, metal, chemical and other industries have been affected to varying degrees, the photovoltaic industry in the polysilicon, photovoltaic glass, photovoltaic bracket upstream of the main material industry silicon, soda ash, steel, aluminum and other industries face limited production pressure, Wind power is also affected to varying degrees, which has a negative impact on the low-carbon energy transition.

In 2022, the overall supply and demand of electricity in the country is tight and balanced, and the supply and demand of electricity during peak hours in some regions is tight. In February, there were many large-scale rain and snow weather processes across the country, and the balance of power supply and demand was tight in a few provinces during some peak hours of electricity consumption. In July and August, the extreme high temperature and low rain weather that lasted the longest and affected the most widely in recent decades appeared in China, superimposed economic recovery growth and pulled the rapid growth of electricity load. There are 21 provincial-level power grid load record high, East and central China's power supply situation is grim, Zhejiang, Jiangsu, Anhui, Sichuan, Chongqing, Hubei and other regions of the power supply and demand situation is tight. In December, a few provinces, such as Guizhou and Yunnan, were affected by factors such as the continuous decline of hydropower storage due to the partial depletion of water in the previous period, and the heating load increased rapidly during the cold wave weather, and the power supply and demand situation was relatively tight. In the future, China is expected to form a pattern of nuclear power as the base and thermal power peak regulation. In 2022, the power generation of China's nuclear power units will account for about 4.98% of the total power generation, which is still lower than the international average. According to the China Nuclear Energy Industry Association, in 2035 and 2060, the proportion of nuclear power generation in China's electricity structure needs to reach about 10% and 20%, respectively, which is comparable to the current average level of OECD countries.

The number of hours used in nuclear power ranks first. Nuclear power plants can run continuously for at least 12 months after one loading, and are not affected by external factors such as fuel supply and weather during operation, and the output power is stable, which is an ideal choice for the base load of the grid. Since 2014, affected by the decline in power demand, nuclear power has also been required to participate in peak adjustment or power reduction operation, and the utilization hours began to decrease year by year, and began to rise in 2021. In 2022, the average utilization hours of nuclear power in the country reached 7616 hours, ranking first among various power generation methods, and the average utilization rate can reach 81%.

2.4 The active and orderly development of nuclear power has become the main theme

The speed of nuclear power development is obviously influenced by policy. During the period from the Eighth Five-Year Plan to the Tenth Five-Year Plan, the national level advocated appropriate and moderate development of nuclear power; Starting from the "11th Five-Year Plan", the plan has made it clear that the construction of nuclear power will be actively promoted, and the focus is on the construction of million kW nuclear power plants. During the "12th Five-Year Plan" to "13th Five-Year Plan" period, the plan clearly defined the safe and efficient development of nuclear power, and highlighted the focus of nuclear power construction on the eastern coast, during which the nuclear power industry entered a stage of rapid development.