The Zhitong Finance App learned that SDIC Securities released a research report saying that demand for electricity from data centers will increase rapidly in the future. The essence of data centers is to convert electricity into computing power. Rapidly growing demand is compounded by the impact of dual-carbon targets. The sustainable development of data centers has become a key issue, and nuclear energy can provide green solutions for data centers. Optimistic about the development trend of the commercial and comprehensive utilization of nuclear energy, I recommend Jiadian Co., Ltd. (000922.SZ), the main helium fan supplier for high-temperature air-cooled reactors. It is recommended to focus on nuclear power valve suppliers CNNC Technology (000777.SZ), Jiangsu Shentong (002438.SZ), nuclear waste treatment equipment supplier Aerospace Chenguang (600501.SH), and nuclear waste treatment automation equipment supplier Jingye Intelligence (688290.SH).
SDIC Securities views are as follows:
The development of nuclear power is one of the key strategies for addressing global energy and environmental challenges:
In order to cope with the rapid increase in energy demand, reduce dependence on traditional fossil energy, and meet the challenges of environmental pollution and global climate change, many countries around the world attach importance to the development of nuclear power. As a clean, low-carbon energy source, nuclear power produces almost no greenhouse gas emissions during operation, and can provide continuous baseload electricity stably and reliably, which is essential for the stable operation of power grids and access to new energy sources. In order to improve the economy of nuclear power plant operation, all countries attach great importance to the development of multi-scenario comprehensive utilization of nuclear energy.
Nuclear power supply data center. Several projects in the US have been implemented or included in the plan:
The essence of data centers is to convert electricity into computing power. Rapidly growing demand is compounded by the impact of dual-carbon targets. The sustainable development of data centers has become a key issue, and nuclear energy can provide green solutions for data centers. According to the “2023 White Paper on the Development of Intelligent Computing Power” published by the Academy of Information and Communications Technology, the global smart computing power growth rate in 2022 was 25.7%, and China's growth rate reached 41.4%. The scale of global computing power is expected to grow at a rate of more than 50% in the next five years. The demand for electricity in data centers will increase rapidly in the future.
In March 2024, Amazon Cloud Services (AWS) purchased the Cumulus Data Center Campus under Talen Energy in Pennsylvania for $650 million. The park is close to Talen Energy's Susquehanna nuclear power plant and can provide sufficient clean electricity to the data center. After the transaction is completed, Amazon will receive the Cumulus data center and its supporting power infrastructure. Talen Energy will sign a 10-year power purchase agreement (PPA) with Amazon to supply electricity from the Susquehanna nuclear power plant. The nuclear power plant was founded in 1983 and currently has two reactors with a total installed capacity of 2.5 GW.
Companies such as Microsoft and Google are also actively studying the application prospects of new nuclear power technologies such as small modular reactors (SMR) in the data center field. Compared with traditional large reactors, SMR is smaller in size, lower in cost, and more suitable for supplying power to data centers.
Green Energy Partners plans to establish a data center and energy park near the Surrey Nuclear Power Plant in Virginia, and plans to build 30 data centers, as well as small modular reactors and on-site hydrogen production.
The commercialization of high-temperature air-cooled reactors in China is gradually being implemented, and heating and steam supply are being implemented:
According to the definition of the International Nuclear Energy Forum, fourth-generation nuclear energy technology aims to improve the sustainability, economy, safety, reliability and nuclear proliferation prevention capabilities of nuclear energy. Comprehensive utilization of nuclear energy is an important way to improve the economy of nuclear energy.
The Shandong Rongcheng Shidaowan High Temperature Air Cooled Reactor Nuclear Power Plant demonstration project, a major national science and technology project with completely independent intellectual property rights, has already been put into commercial operation.
On March 27, 2024, the station's nuclear heating project was officially connected to the grid, marking the first time that China's fourth-generation nuclear heating system provided heating services to urban residents, and achieved a major breakthrough in the comprehensive utilization of fourth-generation nuclear energy. The project uses high-temperature steam extracted from a high-temperature air-cooled reactor steam system to heat the water in the heat exchanger to generate high-temperature water. The high-temperature water is then sent to heat exchange stations in municipal and power plant energy zones for secondary heat exchange, and eventually converted into hot water for residents to heat. The project not only played a role in safeguarding and improving people's livelihood, but also provided strong support for the city's low-carbon development.
On March 29, 2024, the executive meeting of the Ministry of Ecology and Environment reviewed and approved in principle the environmental impact report (site selection stage) and site safety analysis report for the first phase of the Jiangsu Xuxu Nuclear Energy Heating Plant project. The project plans to build 2 “Hualong 1” pressurized water reactors and 1 HTRPM600S high temperature air-cooled reactor unit. The power generation power of the 3 units is 1652.9 MW (including the Hualong 1 single power generation power 729.7 MW, and the single high-temperature air-cooled reactor power generation power 193.5 MW), the design heat load is 8164 t/h, and the steam supply capacity is 50% of the design heat load (4082t/h). The total investment of the project is about 73.995 billion yuan (excluding supporting transmission and transformation projects and heat transfer lines outside the plant). The project is the first domestic nuclear power plant with steam heating as its main purpose, taking into account electricity supply. It is of great significance for the Xuwei Chemical Park to achieve low-carbon heating and steam supply.
The small modular nuclear reactor “Linglong 1” demonstration project continues to advance, and the comprehensive utilization of nuclear energy can be expected in the future:
According to the International Atomic Energy Agency, a small nuclear reactor is a nuclear reactor with an electrical power of less than 300,000 kilowatts. Small reactors have the advantages of flexible power scale, modular installation, easy transportation, strong adaptability to environmental conditions, stable power supply, etc., so in addition to generating electricity, they can also meet various needs for comprehensive use of nuclear energy, such as urban heating, seawater desalination, oil extraction, etc., and are suitable for various scenarios such as parks, islands, mining areas, and energy-intensive enterprises providing their own energy.
In 2011, CNNC officially launched the research and development of a modular small stack, codenamed ACP100, also known as “Linglong 1”. In 2016, “Linglong 1” became the world's first small pressurized water reactor technology to pass the International Atomic Energy Agency (IAEA) safety review, marking the maturity of its technology.
Subsequently, in 2017, the National Nuclear Safety Administration officially accepted the “Two Evaluations” report for the “Linglong 1” demonstration project, speeding up the project approval and construction process. In 2018, CNNC announced the completion of the preliminary design review work for the Hainan Changjiang Xiaodui demonstration project using “Linglong 1” technology, laying the foundation for engineering application. In 2021, the project was officially approved by the National Development and Reform Commission, marking the official approval for the construction of the Hainan Changjiang Multi-purpose Modular Small Reactor Technology Demonstration Project, with a single unit capacity of 125 MW. On July 13 of the same year, the project officially started in Changjiang, Hainan, making it the world's first onshore commercial modular reactor. In 2024, the Linglong 1 project continued to reach important milestones, including the completion of the outer dome hoisting, the 220kV auxiliary power line and auxiliary transformer being impacted and entered the 24-hour trial operation phase, and the 220kV auxiliary power supply reverse transmission work was successful. The whole process of the project, from concept to actual construction, and finally close to commissioning.
Linglong 1 is not only suitable for the comprehensive use of nuclear energy in multiple scenarios, but will also become an important business card for China's nuclear energy “going global”. Linglong 1 is wholly owned by China Nuclear Power. Linglong 1 not only demonstrated China's comprehensive implementation and verification capabilities in the field of modular small reactors, but also accelerated China's independent innovation in this field, consolidated China's first-mover advantage, and successfully formed an independent reactor brand. With the completion and operation of Linglong 1 in China, it can be promoted in other countries in the future.
Risk warning: Policy progress falls short of expectations; construction progress of nuclear power projects falls short of expectations; technological development falls short of expectations.