Its no secret that China’s nuclear capacity is growing rapidly. China’s government views nuclear power as a key part of their strategy to reduce carbon emissions and improve standard of living for their people.
Historically, China has been overly dependent on coal fired power plants. Pollution has become such a problem in many cities that the rich people are leaving and the poor people are complaining. Additionally, because coal is so dirty, China needs to have its power plants away from its most important cities. This makes managing the grid more complex. Thus reducing carbon emissions by moving away from coal is actually a national security and stability issue. Wind and solar power might help, but they aren’t nearly as effective as nuclear power.
Additionally, China is rapidly building out its technology industry. In some ways it is ahead of the US in terms of 5G technology necessary to power the “internet of things” and artificial intelligence. Modern 5G technology requires a lot more power than older technologies. China is quickly developing electric cars. Having a car that doesn’t produce emissions is only useful if the electric power grid from which it charges is also clean. As the quality of life increases and modern technology becomes more available, per capita electricity consumption in China is expected to increase dramatically: from 4900 kWh in 2018 to 9000 kWh/yr in 2050.
Hence China has included a focus on nuclear power in recent 5 year plans. Many people have ignored this buildup. Most of the impacts won’t really be felt until later this decade. However, the Chinese Nuclear buildup is becoming more apparent in critical statistics.
World Nuclear News just reported that China’s Nuclear power output jumped 18% year on year.
China is in the process of building many more reactors. This is an important detail for uranium investors to monitor. From the article:
There are a further 12 reactors under construction in China, with a combined capacity of 12,244 MWe. Another 42 units are planned, which will add 48,660 MWe of capacity, with more reactors proposed.
As China builds more nuclear reactors, they will ramp up their purchases of uranium. Chinese investors have been buying up capacity in both emerging and developed jurisdictions. For example, the Chinese governments have been purchasing mines in Africa, and the Chinese investors own large stakes in Canadian miners such as Nexgen energy, and Fission Uranium. China is a strategic and patient buyer, so they won’t buy too aggressively. However their buildup of nuclear power plants puts a constant bid under the price of uranium Additionally, if China ends up controlling a lot of the world’s capacity it could make it difficult for US nuclear utilities to acquire uranium when they need it. This is a potential catalyst to send the price of uranium higher.
ost US investors are unaware of this fact. Too many investor still believe nuclear power is dying. In reality its found a new life in China. The long run implications for the uranium bull market are enormous.
Click here for the full article from World Nuclear News