Osborne agrees to China investing in UK nuclear plants

 

George Osborne: "We're going to make sure of course that the very stringent British rules on safety are applied"

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The Chancellor, George Osborne, has announced that the UK will allow Chinese companies to take a stake in British nuclear power plants.

The announcement also said that Chinese firms might eventually be allowed to take majority stakes in British nuclear plants.

Mr Osborne made the announcement on the last day of a trade visit to China.

The first China deal could be as early as next week, with the go ahead for a new £14bn plant at the Hinkley C site.

Also on Thursday, a report commissioned for the prime minister warned of a growing risk of power shortages over the next few years.

The Royal Academy of Engineering said the closure of older power plants and the slow progress in building news ones was likely to stretch the system "close to its limits".

Supply is expected to come under strain in the winter of 2014-15.

Most existing coal-fired plants are expected to be closed in 2015 to meet European Union pollution directives, while many gas-fired power plants are not being used at the moment because gas is so expensive.

These would take time and money to bring back on stream.

'Fair and affordable'

The Hinkley C project, in Somerset, will be the first new nuclear power station since 1995.

Hinkley C's construction will be led by the French state-controlled giant, EDF, which has been looking for a partner or partners to share the costs.

Start Quote

When you think about the history of nuclear power, it may be shocking to some that businesses and investors from Britain - whose scientists and engineers were pioneers in this technology in the early days - will not own the new generation of nuclear power plants”

End Quote

EDF has been negotiating with three Chinese nuclear giants on the Hinkley C project - CGN, CNNC and SNPTC - all of which have been seen by the chancellor this week.

Our business editor, Robert Peston, says he has been told that one or two of these will end up owning perhaps 30% of Hinkley C.

A DECC spokesperson said talks about a contract were underway: "Negotiations remain ongoing between the government and EDF on the potential terms of an investment contract for Hinkley Point C. No agreement has as yet been reached.

"A contract will only be offered if it is value for money, fair and affordable, in line with government policy on no public subsidy for new nuclear and consistent with state-aid rules."

Securing supplies

Mr Osborne made the announcement while on a visit to the Taishan nuclear plant in southern China on Thursday which is itself a collaboration between EDF and the China General Nuclear Power Group (CGNPG).

He said: "Today is another demonstration of the next big step in the relationship between Britain and China, the world's oldest civil nuclear power and the world's fastest growing civil nuclear power."

The memorandum of understanding also includes roles for British companies in China's nuclear programme.

China has 17 nuclear reactors in operation, which provide about 1% of its electricity production capacity.

Start Quote

Just down the coast from Taishan lies Hong Kong, where environmental groups enjoy far more freedom than they would have in China. They say there are reasons the UK should be cautious ”

End Quote

In the future, Chinese firms might be allowed more than just minority stakes in UK plants. The government said that "over time, stakes in subsequent new power stations could be majority stakes".

At the weekend, the Energy Minister, Ed Davey, said he believed that a "massive" wave of investment from China, Japan and Korea would secure UK's power supply into the future.

Securing future energy supplies is a major challenge.

A portion of energy bills is being diverted to alternative energy investment in wind farms and solar energy.

But the government believes that renewable energy sources cannot provide enough power for the country's energy needs.

The industry regulator, Ofgem, has also warned of the "unprecedented challenge" to secure power supplies.

It said spare electricity power production capacity could fall to 2% by 2015, increasing the risk of blackouts.

 

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  • rate this
    +2

    Comment number 746.

    Yet another example of why privatisation of utilities has been a failure and NO I dont vote Labour (sold just as much off) or Lib Dem (clueless).
    We are called Britain now the Great was lost long ago the only winners are a few greedy rich people in the city and the managers that ran the utilities just after privatisation the rest of us will pay for 30-40 years or more.

  • rate this
    -1

    Comment number 745.

    Well the Tories are true to form. They think the same as the multi nationals - anwerable to no-one and would sell their granny for a fiver. Power and greed is all that matters. What is good for the UK as a whole does not come into the picture.

  • rate this
    +4

    Comment number 744.

    This has got nothing to do with the market - it goes all the way back to the coal lobby and respective governments being scared in case the miners went on strike. This country should have gone Nuclear in the 1960's like the French did, consumers in this country don't begin to know that 30% of our power is from French Nuclear Power stations and is sent by cable under the Channel

  • rate this
    0

    Comment number 743.

    Do we get nectar points for shopping with China - any one checked?

  • rate this
    0

    Comment number 742.

    Is there a conflict of interest when a Conservative British Goverment hands over control of British Nuclear energy provision to a Communist Chinese Government owned conglomerate?

  • rate this
    +2

    Comment number 741.

    Where is our energy security? We build gas turbines but using gas from Russia and now our nuclear power is being financed by Japan and China. Talk of putting our future into the hands of foreign Governments. Since privatisation energy companies seemed to have chased profit and Governments have seemed unable or unwilling to plan for the future. We look stuffed.

  • rate this
    -1

    Comment number 740.

    this dog of a government has no morals . china stifles democracy has very poor human rights and is generally a bad egg but evidently we can overlook that if there is money to be made . this government is morally corrupt and is not fit to represent me but then nor are the labour lot .

  • rate this
    +50

    Comment number 739.

    As I have said in many other HYS, the cost of HS2 could build more nuclear power stations than we could ever need. Keep them in state ownership and then we have control of our own destiny in electricity and, equally importantly, we would be setting the wholesale price charged to the distributing companies. THEN there would be transparency in the fairness or otherwise of consumers prices.

  • rate this
    +3

    Comment number 738.

    So, China is a military super power that the West is very concerned about, now we allow them to help build our Nuclear Power Stations .... mmmm .... is that logical.
    Also, where is our own British Power Industry....all sold off, just like the rest of the Utilities Companies .... come the day when Britain will be held hostage by foreign countries contolling all our utilities and infrastrucure ...

  • rate this
    +4

    Comment number 737.

    I didn't see this in Dave's manifesto at the last election! Perhaps it was in the Chinese PM's manifesto though. Mind you in China they don't get to vote for what they want, a bit like us in the UK really!

  • rate this
    +33

    Comment number 736.

    Energy is an industry where there has never been a rational argument for privatisation, never mind foreign ownership. Energy supply is a fundamental of state infrastructure for both the public and for business which should be subject to national ownership, pricing and delivery. If you can't understand the case for it you might as well argue that government itself be put out to tender.

  • rate this
    -7

    Comment number 735.

    @617 "Final proof that our privatised, de-regulated energy market has failed to deliver"

    Actually its proof that public always expects someone else to pay. That's why we've had no investment. Anyone volunteering to pay more to invest in new power stations? Of course not, because as far as the public are concerned, 'we've already paid' so instead we'll criticise those that are prepared to invest.

  • rate this
    +4

    Comment number 734.

    Have you seen the way Chinese companies treat there workers and they way they run there own power plants they are always shutting off power look at Grangemouth and whats happening there now its owned by the Chinese and it supplies most of Scotland and north England.Its funny if you think about what the Tories said about Miliband being a Comy then Osborne is on the first plane to China.

  • rate this
    0

    Comment number 733.

    715.scottycam

    Oh dear, bit of an own goal there scotty with all that whining!

  • rate this
    -5

    Comment number 732.

    'Surely this should be publically owned with the intention of delivering affordable sustainable energy or decades to come? We're going to be financially black mailed into slavery by our foreign overlords at this rate'

    LOL - evidence?

    You remember when 'we did it ourselves' and the coal unions ran the country right?

  • rate this
    +3

    Comment number 731.

    Having been America's poodle for so long, we are now going to run to China to be their poodle. Perhaps the govt. should thnk about how dogs are treated in China.

    Osborne may be starting to look more like a cadaverous politburo member, but how will the Daily Mail take the selling-out of our country to these 'Marxists'.

  • rate this
    +3

    Comment number 730.

    Surely this should be publically owned with the intention of delivering affordable sustainable energy or decades to come? We're going to be financially black mailed into slavery by our foreign overlords at this rate

  • rate this
    +1

    Comment number 729.

    Nuclear power = "Controlled" nuclear bomb on home soil.
    Nuclear meltdowns = unescapable misery for millions for generations.

    Paying a foreign power to manufacture Nuclear Power on UK soil = Very High Risk, Insecure - words fail me.

    London seems to breed politicians which have no understanding of what a nation state, morals and values are.

  • rate this
    +1

    Comment number 728.

    Why bother giving a stake of power stations to China. Like they need it or care. Tories bribing with energy. Wonder what kind of gifts were exchaged when Osborne visited China?
    Probably something as worthless as practically possible but enough financially to make a working man weep.

  • rate this
    0

    Comment number 727.

    Why is this new?
    We've already passed over our own nuclear engineering talents to the French.

 

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