Private Capital Joins Nuclear Industry for Development
Huaneng Shandong Shidao Bay Nuclear Power Co., Ltd.'s operation department technicians monitor equipment operation inside the plant. Xinhua News Agency reporter Liang Xu takes the photo.
Not long ago, the State Council's executive meeting decided to approve five nuclear power projects with a total investment of more than 240 billion yuan, with each project's private capital shareholding ratio reaching 10%. This is an important step in the market-oriented reform of China's nuclear power industry, demonstrating the country's determination to support private enterprises in participating in major national construction projects.
Due to the large investment scale and long cycle of nuclear power projects, as well as higher safety requirements, China's nuclear power industry has been dominated by state-owned enterprises. Why did the five nuclear power projects introduce a larger proportion of private capital this time? How can the private economy better participate in the development of the nuclear power industry?
Further opening up of market access
The reporter learned from the National Development and Reform Commission and the National Energy Administration that the approved nuclear power projects include the first phase of the Xuyi Nuclear Energy Heating Power Plant in Jiangsu, the second phase of the Sanao Nuclear Power Station in Zhejiang, the first phase of the Zhaoyuan Nuclear Power Station in Shandong, the first phase of the Bailong Nuclear Power Station in Guangxi, and the No. 1 and No. 2 unit projects of the Lufeng Nuclear Power Station in Guangdong, with each project's private capital shareholding ratio reaching 10%.
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"From participating in partial links such as the nuclear power industry chain and supply chain to entering the investment field, the purpose of introducing private capital into the nuclear power industry this time is to share the development achievements of the nuclear power industry with private capital and further promote the development of the private economy." said a person in charge of the National Energy Administration.
The large number of private enterprises participating and the large shareholding ratio are the prominent features of the market-oriented reform of this nuclear power project. As early as September 2020, the first phase of the Sanao Nuclear Power Station in Zhejiang was approved for construction, with state-owned capital accounting for 98%, and Geely Group became the first private enterprise to enter the nuclear power project with a 2% shareholding ratio. The approved second phase of the Sanao Nuclear Power Station this time, private enterprises hold up to 10%, and the number of participating private enterprises has increased to four.
The person in charge of the Sanao Nuclear Power Project said, "For nuclear power companies, the investment in a single nuclear power project is huge, and private enterprise participation is conducive to reducing project financing pressure. For private enterprises, nuclear power has the characteristics of low power generation cost, good power supply stability, and low carbon emissions, which is conducive to promoting the implementation of the 'dual carbon' goal."
In the view of Zhang Linshan, director of the Research Office of the Economic System and Management Research Institute of the National Development and Reform Commission, there is both complementarity and cooperation between state-owned capital and private capital in the nuclear power industry, each playing a different role. The entry of private capital will bring new momentum to the development of the nuclear power industry.
Zhang Linshan believes that private capital provides an important supplementary source of funds for nuclear power projects, which helps to alleviate project funding pressure and accelerate the development of the nuclear power industry. At the same time, the participation of private capital can introduce market mechanisms, stimulate market vitality in the nuclear power industry, and promote technological innovation and management optimization."Compared to the past, this nuclear power project has introduced private capital in a more open and innovative way, with more prominent effects and a broader impact. It not only increases the participation of private capital but also helps to promote the development of mixed-ownership economy and enhance market vitality," Zhang Linshan told the reporter.
Sharing development opportunities and dividends
"As a supplier of nuclear power materials, we have always hoped to participate in nuclear power project investments in the past. With the promotion of relevant departments, we have the opportunity to hold a higher share ratio, and we have truly felt the country's determination to support private capital," said Li Zhengzhou, a director of Jiuli Group Co., Ltd. He hopes to help the high-quality development of the nuclear power industry by participating in nuclear power projects.
In the Guangdong Lufeng Nuclear Power Station Unit 1 and Unit 2 project, Jiuli Group Co., Ltd. holds a 5% stake. Previously, Jiuli Group has provided core components and products and services for Qinshan, Daya Bay, Tianwan, Fangchenggang, Hongyanhe and other nuclear power projects, actively participating in the national nuclear power construction.
Li Zhengzhou said that based on more than 30 years of accumulated technical strength and R&D capabilities in serving the energy field, the company is confident in transforming from a pure nuclear power material supplier to a shareholder of nuclear power projects, and further contributing to the development of China's nuclear energy and green and low-carbon development.
The "Decision of the Central Committee of the Communist Party of China on Further Comprehensively Deepening Reform and Promoting Chinese-Style Modernization" passed by the third plenary session of the 20th Central Committee of the Communist Party of China proposes to improve the long-term mechanism for private enterprises to participate in national major project construction.
Zhang Linshan introduced that in recent years, China has promoted more private capital to participate in major infrastructure project construction, and many industries have relaxed market access for private capital, giving private capital the opportunity to participate in project construction and operation in more fields. For example, the first high-speed railway in China controlled by private capital, the Hangzhou-Taizhou high-speed railway, is controlled by 51% by the Zhejiang private joint venture led by Fosun Group.
Previously, the "Guiding Opinions of the State Council on Innovating the Investment and Financing Mechanism in Key Areas and Encouraging Social Investment" proposed to introduce social capital to participate in nuclear power project investment and encourage private capital to enter the nuclear power equipment development and nuclear power service fields under the premise of ensuring that the main body with nuclear power holding qualification undertakes nuclear safety responsibilities.
In November 2022, the National Development and Reform Commission issued the "Opinions on Further Improving the Policy Environment and Increasing Support for the Development of Private Investment," proposing 21 specific measures to support private investment in major engineering construction.
"The introduction of private capital in this nuclear power project fully reflects the country's firm determination to support the development of the private economy. It is a major measure to implement the decisions and deployments of the Party Central Committee and the State Council on promoting the development and growth of the private economy, and it is also a symbolic measure to promote the development of private investment," said a person in charge of the Private Economic Development Bureau of the National Development and Reform Commission.Gradually Improve Long-term Mechanisms
Nuclear power projects are characterized by large investments, long life cycles, and stable long-term returns. Each million-kilowatt third-generation nuclear power unit requires a total investment of about 20 billion yuan, with a construction period of about 5 years and a project investment payback period of 15 to 20 years.
In recent years, China's electricity demand has maintained a stable growth trend. Data released by the National Energy Administration shows that in 2023, the total electricity consumption of the whole society was 9,224.1 billion kilowatt-hours, a year-on-year increase of 6.7%. The huge demand for electricity consumption has put forward higher requirements for energy supply.
The "14th Five-Year Plan for Modern Energy System" issued by the National Development and Reform Commission and the National Energy Administration clearly states that by 2025, China's nuclear power operation capacity will reach about 70 million kilowatts.
Taking the Sanao Nuclear Power Station as an example, it is planned to build 6 "Hualong One" units, among which the No. 1 unit started construction on December 31, 2020, and is expected to be put into operation in 2026. After all 6 units are commercially operated, they will provide clean energy of more than 54 billion kilowatt-hours per year for Zhejiang Province and even the Yangtze River Delta region, close to the total electricity consumption of Wenzhou City in 2023.
Experts said that promoting private capital investment in the nuclear power industry will help optimize the investment structure of the nuclear power industry, promote the continuous enhancement of power supply capacity, thereby further optimizing the power structure, improving the stability of energy supply, and better meeting the demand for electricity consumption.
"Next, we will continue to actively create conditions and remove access barriers. On the premise of fully respecting the investment intentions of enterprises, we will adhere to the principles of fairness, openness, and justice, and attract more private capital to participate in major projects such as nuclear power and railways." said Jin Xiandong, the spokesperson of the National Development and Reform Commission and the director of the Policy Research Office.
The entry of private capital into the nuclear power industry this time has released more positive signals for continuously expanding the development space of private enterprises and stimulating the enthusiasm of private investment. The person in charge of the Private Economic Development Bureau of the National Development and Reform Commission said that they will gradually improve the working mechanism for private capital to hold shares in nuclear power projects, improve access conditions and selection procedures, and establish a transparent interest distribution and exit mechanism; further improve long-term mechanisms, encourage and attract more private capital to participate in major national construction projects, and allow private enterprises to enter, develop, and make contributions.
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