China’s quiet energy revolution: The switch from nuclear to renewable energy

There is now a policy dispute about the roles of nuclear and renewable energy in future Australian low emission energy systems. The experience of China over more than a decade provides compelling evidence on how this debate will be resolved. In December 2011 China’s National Energy Administration announced that China would make nuclear energy the foundation of its electricity generation system in the next “10 to 20 years”. Just over a decade later China has wound back those ambitious targets and reoriented its low emission energy strategy around the rapid deployment of renewable solar and wind energy at unprecedented rates.

Australia has seen a campaign against the use of renewable energy technologies and for the benefits of nuclear energy in developing Australia’s future low emission energy systems. The Federal Opposition has now adopted this position as their policy. The recent experience of China provides a compelling commentary on this decision.

In December 2011 China’s National Energy Administration (NEA) announced that China would make nuclear energy the foundation of its electricity generation system in the next “10 to 20 years”, adding as much as 300 gigawatts (GWe) of nuclear capacity over that period.

This was followed by a period of delay as China undertook a comprehensive review of nuclear safety in the aftermath of the Fukushima nuclear disaster.

Subsequently, moderated nuclear energy targets were established, aiming for a nuclear energy contribution of 15% of China’s total electricity generation by 2035, 20-25% by 2050 and 45% in the second half of the century.

However by 2023 it was becoming clear that China’s nuclear construction program was well behind schedule. The target for 2020 had not been achieved, and targets for subsequent 5-year plans were unlikely to be achieved.

In September 2023 the China Nuclear Energy Association (CNEA) reported that China was now aiming to achieve a nuclear energy contribution of 10% by 2035, increasing to around 18% by 2060.

The CNEA also indicated that ‘greenlighting’ of new construction would now be at the rate of 6-8 large nuclear power reactors per year – not the 10 per year previously targeted for 2020-2035 and beyond. This will result in new nuclear generation increasing by 60-80 terawatt-hours (TWh) annually.

Meanwhile the deployment of renewable energy (primarily solar and wind energy) was dramatically accelerated in 2023, with the installation of 217GWe of new solar capacity and 70GWe of new wind capacity.

This represents an increase of around 400TWh in annual low emission generation – the quantitative equivalent of 40 large nuclear power reactors, or four times the average annual output of the Three Gorges Dam hydroelectric system (the world’s largest power station).

In 2023 energy analysts started reporting that China was now expected to achieve or exceed its 2030 target of 1200GWe for the total installed capacity of solar and wind energy by 2025, and was now planning to triple the 2030 objective, to reach 3900GWe.

Previously China expected that its energy emissions would peak in 2030, but revised forecasts are now indicating that this could happen as early as 2024, 5-6 years ahead of target.

By the end of 2023 it was clear that nuclear energy was no longer going to be the foundation of China’s future electricity generation system, and that this task had shifted to renewable energy.

So what has happened? There’s no single answer, but two key factors appear to be at play.

The first is the emergence of renewable energy technologies at competitive scale and cost since 2011.

Between 2011 and 2022, the cost of solar PV modules declined by 85%, wind energy costs by 60-70%, and battery costs by 90%.

China now dominates the global production of solar PV panels, wind turbines and batteries, with costs expected to continue to decline significantly for the foreseeable future while performance improves.

The consequence is that renewable energy generation can now be deployed economically at rates five to eight times faster than nuclear energy, which is constrained by logistical and regulatory capability, safety, site availability and other factors.

The second is the slow delivery of new nuclear generation which contributed to continued ‘greenlighting’ of new coal-fired generation to underwrite energy security, as it became clear that deployment rates for new low emission electricity generation were insufficient to blunt demand from provincial governments for new coal-fired generators, even though many existing plants are operating at uneconomically low capacity factors.

By 2035, under the original plan, combined nuclear, solar and wind generation would have been comparable to current coal generation but insufficient to meet significantly increased new electricity demand.

Under the new plans, combined solar, wind and nuclear generation is likely to match current coal generation and meet new demand, with solar and wind energy contributing around 85% of this low emission generation.

By 2030 another factor will come into play, with China’s battery giant CATL developing long duration utility battery systems that will provide dispatchable electricity from renewable sources at competitive or lower costs than either coal or nuclear generated electricity.

The central message here is that even in China – the world’s largest industrial economy and preeminent builder of advanced civil infrastructure in the 21^st century – nuclear energy cannot compete with renewable energy to deliver low emission electricity generation at the deployment rates needed to meet mid-century emission targets.

This article was first published in Pearls and Irritations on 6 April 2024.

Derek Woolner and David Glynne Jones co-author and publish articles on the implications of emerging energy technologies for defence policy, strategy and future acquisition programs.

Derek Woolner is co-author of “The Collins Class Submarine Story: Steel, Spies and Spin”. He is a previous director of the Foreign Affairs and Defence Group in the Parliamentary Research Service.

David Glynne Jones is an independent advocate for the adoption of renewable energy and electrification across all sectors of the Australian economy. He is currently assessing the implications of emerging advanced battery technology for low emission electrification of the Australian transport sector.