Construction began on November 6, 2026, on the reactor facilities of Unit 3, a nuclear power unit using a high-temperature gas-cooled reactor, at Xuwei in Lianyungang, Jiangsu Province, China. On-site reporting by China News Service reporter Gu Hua carried the news the same day. China National Nuclear Power's announcement dated November 6 also states that the first concrete pour is scheduled for that day, and gives Unit 3 a rated electrical output of 660 MW and a design operating life of 60 years. With construction starting, the plan to use heat generated by the reactor as industrial steam has moved into the building phase.
Key to gauging the scale of the project is the roughly 10.3 billion yuan high-temperature reactor procurement plan that China National Nuclear Power disclosed in August. However, this is not a newly finalized contract value, nor does it represent the total construction cost of Xuwei Phase I. Phase I plans to combine two Hualong One pressurized water reactors with one high-temperature gas-cooled reactor to supply industrial steam and electricity. Unless the equipment and services covered by the procurement amount are distinguished from the scope of steam to be sold once the plant is complete, the size of the figure alone cannot tell us whether the project will be profitable.
What the roughly 10.3 billion yuan procurement plan includes
According to China National Nuclear Power's announcement dated August 1, 2026, its subsidiary Zhonghe Su Neng will procure contracting services for the high-temperature reactor project from CNNC Energy (中核能源). The planned amount is 1,032,192 (ten-thousand) yuan, which converts to 10,321,920,000 yuan, or about 10.32 billion yuan.
The scope of work listed on page 2 of the announcement is broad, running from design of the high-temperature reactor through procurement and delivery of equipment and materials. It also covers support for obtaining licenses and permits, construction technology support, commissioning support, and equipment training, along with the project management that goes with them. It is therefore not appropriate to treat the roughly 10.3 billion yuan as the purchase price of the reactor itself and related equipment alone. In addition, the figure is only a planned procurement amount, and should be distinguished from the total project cost of Xuwei Phase I or a finalized contract value.
Cross-checking the announcement against the half-year report China National Nuclear Power published on August 29 and China National Nuclear Power's release posted by the China Nuclear Energy Association on August 20, 2024, the scope and disclosure timing of each figure can be summarized as follows.
| Disclosed item | Scope / content | Timing / status | Caveat |
|---|---|---|---|
| 1,032,192 (ten-thousand) yuan (about 10.3 billion yuan) | Procurement plan for contracting services on the high-temperature reactor project | Announced August 1, 2026. Final amount to be set by contract | Not the total cost of Phase I or a finalized contract value |
| Work listed in the announcement | Design; procurement and delivery of equipment and materials; support for licensing, construction and commissioning; training; project management | Page 2 of the August 1 announcement | Does not represent equipment purchase costs alone |
| Shareholder approval and contract status | Procurement plan for the high-temperature reactor project | Approved by shareholders on August 17. Unsigned as of the half-year report disclosure | Does not indicate the contract status as of November |
| 32.5 million tons of industrial steam per year | Xuwei Phase I as a whole: two Hualong One units and one high-temperature gas-cooled reactor | Supply plan once Phase I is complete and operating | Not the supply volume of the high-temperature reactor alone; cannot be compared directly with the 10.3 billion yuan |
It is worth noting that the figures relating to the same Xuwei project each cover a different scope. The work listed in the procurement announcement alone does not settle where it ends and other construction contracts begin, nor the final breakdown of the overall project cost. The spending plan for the high-temperature reactor project and the annual supply plan for the facility as a whole, with its three reactors, need to be considered separately.
From shareholder approval to contract signing
According to the August announcement, the supplier CNNC Energy is a company in which China National Nuclear Corporation (CNNC) holds 45.98%. Because the deal is a related-party transaction with an affiliate controlled by CNNC, it was planned to go through the prescribed approval procedures.
How the roughly 10.3 billion yuan was calculated is explained on page 4 of the announcement. It was based on an estimate approved by the authorities and calculated with reference to price levels for similar projects and equipment and material prices at the time. In other words, it is an amount estimated at the planning stage, not a price fixed through competitive bidding. The announcement states clearly that the final transaction price will be determined by the contract concluded between the parties.
An extraordinary shareholders' meeting held on August 17 then approved the procurement plan. However, page 31 of the half-year report published on August 29 states that the transaction contract had not yet been signed at the time of disclosure. The shareholders' meeting authorized management to approve the specific transaction details and contract within the scope of the procurement plan, and allowed for a procedure in which both sides sign the contract after that approval.
Shareholder approval and contract signing are thus separate procedures. That said, the unsigned status noted in the half-year report does not necessarily continue through November, and it cannot be asserted that no contract has been concluded even now. Having understood what the roughly 10.3 billion yuan procurement figure means, the next thing to check is how much heat and electricity the facility under construction is planned to supply.
Industrial steam projects cannot be judged by electrical output alone
According to the plan China National Nuclear Power announced in 2024, Xuwei Phase I will use an operating method that adjusts power generation to heat demand. First, the main steam of the Hualong One units is used to heat demineralized water and produce saturated steam. That steam is then heated further by the main steam of the high-temperature gas-cooled reactor and supplied for industrial use. For this reason, the plan calls for a dedicated steam heat exchange station and a combination of pressurized water reactors and a high-temperature gas-cooled reactor to supply heat to industry.
The operator expects that, once Phase I is complete and operating, it will supply 32.5 million tons of industrial steam per year, with maximum annual power generation exceeding 11.5 billion kWh. Both are planned values for Phase I as a whole, combining two Hualong One units and one high-temperature gas-cooled reactor, and do not indicate the performance or track record of Unit 3 alone. The 660 MW rated electrical output of the newly started Unit 3 should likewise be distinguished from the supply scale of the entire power generation facility, including the other two units.
China also has a precedent for moving a high-temperature gas-cooled reactor into commercial operation. According to a Tsinghua University announcement dated December 8, 2023, the Shidaowan high-temperature gas-cooled reactor demonstration project entered commercial operation after a 168-hour continuous operation test. The university describes high-temperature gas-cooled reactor technology as capable of supplying industrial steam at 300 to 500°C. However, this temperature range is a general description of what such reactors can supply, and does not indicate the contracted temperature of steam actually supplied to customers at Xuwei.
For a reactor whose main uses include supplying industrial steam, the value of the facility cannot be compared by electrical output alone. When more energy is used for heat supply, the balance with the energy available for power generation changes accordingly. To understand how the project actually works, it is necessary to confirm what temperature and pressure of steam can be supplied, and in what volumes and how reliably, as well as how heat demand and power generation will be combined in operation.
Judging profitability requires steam sales terms and the total project cost
Dividing the roughly 10.3 billion yuan procurement plan by the annual industrial steam supply of 32.5 million tons does not yield a steam sales price. The former is the planned amount for design, procurement and support work on the high-temperature reactor project, while the latter is the annual supply plan for the whole of Phase I, which consists of three reactors. The equipment and periods covered do not match, and investment in equipment is also different from annual operating costs and sales revenue.
To evaluate profitability, one first needs to confirm the temperature and pressure of the steam supplied to customers, and to know the supply volume and sales price for each. The conditions under which steam can be supplied continuously and the capacity utilization of the equipment are also important factors in revenue. Furthermore, unless the allocation between heat supply and power generation is sorted out and matched against total costs, including financing costs, the finances of the business as a whole, selling industrial steam and electricity, cannot be assessed. The disclosed materials confirmed so far do not provide the conditions needed for such a calculation.
Between the start of construction and the actual start of steam supply, procedures other than construction and technical verification also remain. The construction permit issued by China's National Nuclear Safety Administration, dated November 2, authorizes work to begin on the first foundation concrete pour. At the same time, it requires long-term material testing of high-temperature components and the submission of data, and stipulates that an operating license must be applied for before the first fuel loading. The start of construction therefore marks a move into the building phase, but it does not mean that operation of the reactor or the start of industrial steam supply has been approved.
The start of construction on Xuwei Unit 3 means that the plan to use a reactor's high-temperature heat in industry has advanced to a concrete building stage. However, the roughly 10.3 billion yuan procurement plan alone cannot establish the project's total cost or profitability. Going forward, disclosure of the cost scope fixed in the final contract, along with steam temperature and pressure, supply volumes, conditions for stable supply and sales prices, will be important. Once the construction costs of the facility and the terms of the heat and electricity actually sold become clear, the economics of the industrial steam business can be evaluated more concretely.