Energy Insider: China Approves 11 Nuclear Power Reactors, Curbs Coal Power Expansion

China has set significant strides in its energy and climate policies this week, demonstrating contrasting dynamics within its energy sector. [para. 1]

**Nuclear Power Push:**

China has approved the construction of 11 new nuclear reactors, emphasizing its commitment to expanding nuclear energy capacity. Approved in a high-level meeting led by Premier Li Qiang, these reactors will be distributed across five coastal provinces: Jiangsu, Shandong, Guangdong, Zhejiang, and Guangxi. The total cost is projected to surpass 200 billion yuan ($28 billion). This move is part of China's accelerated expansion in nuclear power, a sector where it leads globally in growth rate. By 2030, China is expected to surpass the U.S. and France in the number of operational nuclear reactors. The latest approvals make 2024 the second-highest year for new reactor approvals, second only to 2008 when 14 reactors were greenlit. [para. 2][para. 3][para. 4]

**Coal Power Slowdown:**

Conversely, China’s coal power expansion has significantly decelerated. Only 10.34 gigawatts (GW) of new coal power capacity were approved between January and June, marking a 79.5% year-on-year decrease, as reported by Greenpeace East Asia. Similarly, the Centre for Research on Energy and Clean Air reported an 83% drop in coal power permits from the previous year, with only 9 GW approved in the first half of this year. This halt highlights a possible pivot in China’s energy strategy, focusing more on renewables and less on coal, a critical period in its energy transition. Whether the slowdown is due to an excess of already approved coal projects or a sign of a declining reliance on coal remains uncertain. [para. 5][para. 6]

**EV Sector and Trade Tensions:**

China reacted strongly against the European Commission's plan to impose elevated tariffs on Chinese-made electric vehicles (EVs), labeling the move as “unreasonable.” The revised tariff hikes target multiple Chinese automakers, with companies like SAIC Motor Corp. Ltd., Geely Automobile Holdings Ltd., and BYD Co. Ltd. facing additional duties ranging from 17% to 36.3%. In contrast, Tesla Inc. will incur a 9% tariff, lower than its competitors due to fewer subsidies from the Chinese government. These developments come amid ongoing investigations into state subsidies that allegedly allow Chinese manufacturers to undercut European competitors. [para. 7][para. 8][para. 9][para. 10]

**Mixed Export Performance:**

China’s “new three” green transition products exhibited mixed export performances in July. While exported EVs saw a 38.7% increase in volume and 19.8% growth in value, the export values of lithium-ion batteries and solar cells diverged. Lithium-ion battery exports remained nearly flat in volume but increased 7% in value to $5.4 billion. Solar cell units surged by 28.5% in exports, but their value dropped by 18.3% to $2.6 billion. The divergence in performance reflects the complexity as Chinese manufacturers navigate external trade pressures and domestic market dynamics marked by overcapacity and slowing demand. [para. 11][para. 12]

**Energy Equipment Upgrades:**

The central government has called for substantial investments to upgrade energy sector equipment, including coal power units and wind turbines. By 2027, investment volumes are expected to increase by one-quarter from 2023 levels, as outlined by the National Development and Reform Commission and the National Energy Administration. This initiative aims to bolster consumption and accelerate the energy transition, aligned with directives from a July State Council meeting focused on unleashing domestic demand potential. A trade-in program for new-energy vehicles, initiated in April, has already led to a surpassing of fossil fuel car sales as of July. [para. 13][para. 14]

In summary, China is making significant advancements in diversifying its energy portfolio, balancing nuclear expansion with a coal power slowdown, while addressing external trade challenges and pushing for technological upgrades in its energy infrastructure. [para. 1][para. 3][para. 4][para. 5][para. 6][para. 7][para. 8][para. 9][para. 10][para. 11][para. 12][para. 13][para. 14]