China approves ¥170 billion nuclear expansion with 8 new reactors under 15th Five-Year Plan

On August 3, despite weakness across the broader A-share market, the nuclear energy sector surged against the trend. China Nuclear Engineering, Libert, and Jiangsu Shengtong all hit daily limits with gains. Hong Kong-listed nuclear stocks similarly rallied, with China General Nuclear Mining up 4.55%, China Nuclear International up 3.49%, and China General Nuclear Power up 2.77%.

The catalyst came over the preceding weekend. On July 31, the State Council Executive Meeting approved four nuclear power projects comprising eight reactor units. The announcement sent waves of excitement through the nuclear industry—this was the first batch of nuclear power projects approved during the 15th Five-Year Plan period, with total investment exceeding 170 billion yuan.

Yet beneath the enthusiasm lies a more pressing question: will this money actually generate returns?

As of June 2026, China has 62 nuclear power units in commercial operation with an installed capacity of 66.14 million kilowatts. According to the "15th Five-Year Plan for New Energy System Construction," installed nuclear capacity should reach approximately 110 million kilowatts by 2030. In other words, there remains capacity for roughly 44 million kilowatts of new installations over the next four years.

A Citic Securities research report provides more granular detail. China Nuclear currently has 18 units under construction or approved and awaiting construction, with an installed capacity of 20.675 million kilowatts. According to plans, 2027 will see a concentrated commissioning of Sanmen Units 3-4, Tianwan Unit 8, and Xudabao Unit 3—China Nuclear's first production peak. By 2030, China Nuclear's installed capacity in operation is projected to reach 40.138 million kilowatts, a 53.1% increase from current levels.

China General Nuclear is equally ambitious. With 30 units in operation and 18 units under construction or approved, it projects concentrated commissioning of Lufeng Units 1-2, Huizhou Unit 3, Ningde Unit 6, and Cangnan Unit 3 by 2030. At that point, China General Nuclear's installed capacity in operation will reach 46.392 million kilowatts, a 35.5% increase.

Of the eight newly approved units, China Nuclear secured four; China General Nuclear obtained two; and China Energy Investment's Shandong Laiyang project took two units, marking the first batch-scale construction project of the "Hualong One" technology following the Rongcheng demonstration project.

From 2025 through early 2026, the nuclear sector endured difficult conditions. Market-based trading electricity prices temporarily fell below approved nuclear power rates, a situation directly reflected in financial results. China Nuclear's first-quarter 2026 revenue was 18.925 billion yuan, down 6.65% year-on-year, with net profit attributable to parent down 34.19% to 2.064 billion yuan. China General Nuclear reported first-quarter revenue of 16.319 billion yuan, down 13.25%, with net profit down 9.33% to 2.741 billion yuan.

However, 2026 brought a turning point. Liaoning and Guangxi pioneered a mechanism-based electricity pricing scheme for nuclear power—nuclear units participate in market trading while also receiving differential settlements on specified electricity volumes at the mechanism price. According to Tianfeng Securities' calculations, Liaoning's Hongyanluo nuclear plant shows significantly improved profitability after the policy. Guangxi's grid procurement contracts show nuclear differential fees of 0.033 yuan and 0.063 yuan per kilowatt-hour for February and March respectively.

More critically, the trend is shifting. China Gold Securities data shows August on-grid electricity prices rose 2.08 cents per kilowatt-hour month-on-month, with Gansu and Shaanxi rising 22.3% and 17.3% respectively. Xingye Securities' assessment: if 2026 marks the bottom for electricity prices, 2027 should see clarity on whether power income will escape deflation.

Tianfeng Securities believes the mechanism-based pricing pilots in Liaoning and Guangxi have potential for rollout to major nuclear provinces including Guangdong, Zhejiang, Fujian, and Jiangsu. Once price expectations stabilize, the long-term return logic for nuclear investment becomes sustainable.

The 170 billion yuan in direct investment will drive approximately 500 billion yuan in total output across related supply chains, according to China Galaxy Securities' calculation. A single domestically produced 1-million-kilowatt third-generation nuclear unit requires investment of roughly 2 billion yuan.

Where does this money flow? Equipment manufacturing, nuclear island construction, nuclear fuel cycles, operations and maintenance—the entire supply chain is in scope. Of the eight newly approved units, six employ "Hualong One" technology, with the second phase of Jinyatai and third phase of Taipinglingshan serving as "Hualong One 2.0" demonstration projects. Two units use "Guohe One" technology. For equipment suppliers with third-generation nuclear self-sufficiency capabilities, this represents a multi-year order pipeline.

The capital market delivered its most direct response. On August 3, despite weakness in major A-share indices, the nuclear sector surged with multiple stocks, including China Nuclear Engineering, Libert, and Jiangsu Shengtong, hitting daily limits. In Hong Kong, China General Nuclear Mining rose 4.55%, China Nuclear International 3.49%, and China General Nuclear Power 2.77%.

Notably, public funds' holding proportion in utilities at the end of Q2 fell to 0.26%, significantly below the sector's 2.43% market-value weight—the lowest level since 2021. Extreme underweighting often signals room for upside—when industry fundamentals confirm an inflection point, fund reflows can be formidable.

There are also "hidden players" working behind the scenes. Datang Power participates indirectly in Liaoning Zhuanghe Unit 1 through equity stakes in Datang Nuclear; Zhejiang Energy holds 14.81% indirect equity in the Jinyatai project through its stake in China Nuclear Zhejiang Energy. These listed companies gain nuclear sector exposure through participating investments, capturing stable generation revenue over decades.

From a volume perspective, the 44 million kilowatts of capacity additions over the next four years provide sufficient room for nuclear operators' asset bases to undergo a major expansion. From a pricing perspective, mechanism-based pricing pilots are building a "stabilizer" for nuclear revenues—shielding operations from the violent swings of market electricity prices.

Yet nuclear power has never been a quick business. From approval to commissioning takes five to six years at minimum, and as many as eight to nine. The eight units approved this time will likely begin contributing materially to profits around 2030. Capital markets can price ahead, but returns at the industrial level require time to materialize.

The State Council's statement on the day of approval deserves re-reading: "Build and operate nuclear power units according to the highest global safety standards, strengthen safety oversight across the full chain and all domains, and ensure nuclear power safety is absolutely fail-safe."

Safety is nuclear power's bedrock and the entire premise of this business. On that foundation, the story of dual inflection points—in both volume and price—is only just beginning.