CGN Group is one of the world's largest builder and operator of nuclear power stations. CGN Mining, CGN Group's subsidiary, is the largest single investor in Fission Uranium. In this guest blog post, CGN Mining's Vice President, Mr. He, answers some questions on CGN and on China's approach to nuclear energy.
What is CGN's role in China's energy sector?
China's nuclear power industry has relatively high barriers to entry and is therefore limited to a few large operators. These include China General Nuclear Power Group (CGN), China National Nuclear Corporation (CNNC), and State Power Investment Corporation (SPIC). CGN takes the leading position in terms of nuclear power plants' geographical layout, operating performance, profitability, etc.
As of the end of 2020, CGN has 24 reactors in operation (Mainland China in total: 49 reactors), with the total installed operating capacity of 27.14 million kilowatts. This accounts for 53% of the total installed operating capacity in Mainland China. The group has 7 reactors under construction, with the total installed capacity under construction of 8.21 million kilowatts, accounting for 44% of the total installed capacity under construction in Mainland China.
In addition, CGN is developing the Fangchenggang Unit 3 – the first project to adopt Hualong One, China's self-reliant 3rd generation nuclear power reactor design. With the development and operation of the project, CGN will significantly enhance its competitiveness in the international nuclear power market.
Why does China consider nuclear energy to be such an important part of the country's energy mix going forward?
The Chinese government's strong support for the development of nuclear power reflects China's determination to develop a green economy and demonstrates China's responsibility as a large and responsible developing country. Nuclear power is a clean energy form with zero carbon emissions. It has stability, high efficiency, and large baseload capacity. The vigorous development of nuclear power conforms to the trend of world energy transformation and is in line with the consensus of the international community on the implementation of the "carbon peak and carbon neutral " policies to tackle global climate change.
In September 2020, Chinese President Xi Jinping announced at the 75th Session of the United Nations General Assembly that China will adopt more vigorous policies and measures to strive for the CO2 emissions peak before 2030 and carbon neutrality before 2060. According to the latest report published by the Institute of Energy, Environment and Economics of Tsinghua University, China needs to substantially increase the proportion of clean energy, including nuclear energy, new energy, and renewable energy, in the energy mix up to 80% by 2060, in order to achieve the goals of " carbon peak and carbon neutral".
As a fast-growing, developing country, China's electricity generated by nuclear power only accounts for about 5% of the total electricity generated, which is far below the global average of 10%. In face of the huge demand for new energy in China in the future, the development of nuclear power can not only optimize China's energy supply structure, but also help China to achieve its goals of "carbon peak and carbon neutral".
What are your expectations for nuclear energy in China and in the rest of the world over the next 10 years?
In March of this year, Chinese government released its 2021 "Government Work Report" which stated it would "actively" develop nuclear power. The government also proposed in China's 14th Five-Year Plan that the country's installed nuclear power capacity in operation will reach 70 million kilowatts by 2025, which means that China's total installed capacity in operation will increase by 40% in the next five years.
By the end of May of this year, the government has approved the construction of 5 new reactors. The number of newly approved reactors is very close to the forecast of 6 to 8 new reactors predicted by China Nuclear Energy Association. Furthermore, it is worth watching whether even more new reactors may be approved by Chinese government in the second half of the year.
The nuclear power industry has also made some breakthroughs on a global scale, in addition to China's approval of the new reactor construction in three consecutive years. These include:
Looking into the future, as more and more countries in the world raise the concerns over climate issues and decide to actively implement the " carbon peak and carbon neutral " policies, we strongly believe that global nuclear power industry will receive tremendous development in the next a few decades.
What are your predictions on the uranium market over the next 10 years?
Although it is very difficult to make short-term forecasts for the uranium market, we still can see some obvious trends if we extend the timeline to 10 years or more.
Why did CGN decide to invest in Fission?
CGN Mining is the listed subsidiary of CGN Group's nuclear fuel sector and the main investing and financing platform for the development of the oversea uranium resource. CGN Mining acquired 19.90% of Fission's equity in 2016 under a few rationales: