China is to take a one-third stake in a French-led project to build the first in a new generation of United Kingdom nuclear power plants, investing billions of pounds under a landmark commercial deal to be announced on Wednesday.
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The two Chinese state-owned companies were to build part of the two new nuclear reactors at Hinkley Point, southwestern England, Les Echo said.
Expected to cover 7 per cent of the UK’s electricity needs, the Hinkley Point project also aims to create 1,000 apprenticeships alongside £14 million of investment in education and training.
The European Commission’s approval of Hinkley Point’s minimum price of 92.5 pounds per megawatt-hour, more than twice the current market price, has been challenged by Austria at the European Court of Justice. EDF declined to comment.
The agreement also set up a wider United Kingdom partnership to develop new nuclear power stations at Sizewell and Bradwell. The two nations will publish investments and deals worth a “huge” amount of money, including on nuclear power, Zhang Ji, assistant minister of commerce, said last week in Beijing.
In October 2013, following the signing of a new memorandum of understanding on nuclear cooperation by Britain and China, the UK Treasury confirmed that Chinese companies could eventually become majority stakeholders in new United Kingdom nuclear plants, although initially they are only anticipated to take minority stakes. At Defence Questions this afternoon, the shadow defence secretary Maria Eagle said it was “frankly astounding” that the government is allowing China to back the Hinkley Point project – given the ongoing threat from cyberattacks.
Simon Walker, director general of the Institute of Directors, said: “If we are to keep the lights on, wean ourselves off fossil fuels and meet global climate change targets, nuclear energy has a vital role to play in our economy”. I am confident that our experience and ability mean we will successfully deliver Hinkley Point C and subsequent projects.
Development of new nuclear power stations in Suffolk and Essex will be partly funded by Chinese investment, it was formally announced this afternoon.
Councillor Duncan McGinty, leader of Sedgemoor District Council, said: “We welcome the announcement which represents significant progress for Hinkley Point C which will be the UK’s largest engineering and construction project in modern times”.
Last month George Osborne unveiled a £2bn Government guarantee to secure Chinese backing for the EDF Hinkley Point C plant.
President Xi Jinping is meeting Prime Minister David Cameron later, on the second day of his United Kingdom state visit.
The government has put a price support mechanism in place through which nuclear, and other forms of power production, are guaranteed a minimum electricity sale price, also known as a contract for difference (CfD).
“UK people want to have a better life, want to have clean energy”, he said.
The news has been welcomed by officials in Somerset, who have spoken of the benefits the investment will bring for the area.
However, an EDF’s takeover of Areva’s nuclear business would cancel out the 10 percent stake dedicated to the French firm, meaning the company had to re-assess its equity structure if the deal were to go ahead.
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“The truth is Hinkley C is wrong on every level, and the Government should stop pigheadedly trying to shore it up and switch to supporting the renewable energy revolution”.
