Why the chancellor wants China to invest in UK nuclear

 

Part of what has been holding back the development of new nuclear power plants in the UK is their enormous cost.

The government is refusing to finance these hugely pricey projects directly - although it will allow the owners of any new nuclear generators to charge well above the current market price for any power they produce in years and decades to come, so that the billions in development and construction costs can be recouped.

The big attraction for the chancellor of allowing Chinese companies to invest in Britain's nuclear industry is that they have deep pockets.

On his current trip to China, he has told the biggest Chinese nuclear companies they will in future even be able to own controlling stakes in British power stations, and not just small minority shares.

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, and they may instead belong to China's nuclear power giants (as well as to the French and Japanese).

The first of these deals with Chinese interests is expected to come next week, when the formal go ahead is expected for the construction of a new £14bn plant at the Hinkley C site in Somerset.

This project will be led by the French state-controlled giant, EdF, which has been looking for a partner or partners to share the costs.

I am told that EdF has been negotiating with three nuclear giants, CGN, CNNC and SNPTC. One or two of these is likely to end up owning perhaps 30% of Hinkley C.

George Osborne has met the bosses of all three of these companies, to give them comfort that he is keen for them to invest in British nuclear in general, and in Hinkley C in particular.

Hinkley C's technology will be French, that of Areva. And the capital, the money, will be French, and - it now turns out - probably Chinese too.

 
Robert Peston, economics editor Article written by Robert Peston Robert Peston Economics editor

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  • rate this
    -1

    Comment number 38.

    After £1.2tn bailing out the financial industry (and their special "allowances" for chinese banking), the exchequer can't find the money to back power generation but wants more Chinese money?!?

    Perhaps we could use one of their 'abandoned cities' to stick our utterly useless and greed driven politicos? See how they govern themselves without our money to incentivise away (to the wrong people).

  • rate this
    +3

    Comment number 37.

    Yet another example of this government selling our future generations out. "The Chinese will be allowed to charge what they like!" In twenty years time the only people who will be able to afford to leave in the UK are Chinese hence the simultaneous lifting of visa restrictions.
    This government is a complete scandal.

  • rate this
    +2

    Comment number 36.

    there cannot be much family silver left here

  • rate this
    +1

    Comment number 35.

    Whilst I'm glad that we are going to get some new generating capacity in the UK, I deplore the fact that we have had to look to foreign investment and knowledge to get it built.

  • rate this
    +6

    Comment number 34.

    24. Rob London
    does it matter? if the French and Chinese took their ball back - the on/off switch still remains here :)
    __
    Umm - I thought these things ran on highly hackable computers, but I'm sure GCHQ is on the case. (How is the weather in Cheltenham?)

  • rate this
    +31

    Comment number 33.

    So the UK is effectively just another product in the global economy, whos spoils and riches are shared by investors in foreign countries

    Where, exactly, does that leave our ability to provide any kind of living for ourselves - other than being drones for the rest of the world's wealthy?

  • rate this
    +1

    Comment number 32.

    Sell a commodity and lose it in order to get money. Sell a business and lose control for some income but also lose the profit. To Conservatism the UK is just a business to profit from or alternatively to sell!

  • rate this
    +2

    Comment number 31.

    I remember over past years, all UK governments have often pronounced UKs hi tech abilitys, spinning the crud that we are at forefront.

    We were, one of a few nuclear experts, in design/build but now we have to go running to China, Japan, S Korea, France, Germany to get our nuclear power stations designed & built.

    We have LOST, the most vital EXISTINAL skills enabling home grown maintenance

  • rate this
    +2

    Comment number 30.

    Thank goodness someone has the money and is prepared to stump up. For all the "they are foreigners" stuff from the xenophobes it is interesting that none of our pension funds want to fund the things.

  • rate this
    +2

    Comment number 29.

    So we are applying more diplomatic pressure to Europe to get what we want at the cost of selling our industry and interests to china, if this diplomatic stunt back fires we will be in a allot trouble.
    Thats my take.

  • Comment number 28.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +1

    Comment number 27.

    Chinese come to the UK to build nuclear power plants. With visa restrictions removed, they'll probably bring a lot of their own specialist nuclear workers with them and only the semi and unskilled jobs will go to people here.
    So thats plenty of work for the next wave of unskilled immigration in the UK then.

  • rate this
    +1

    Comment number 26.

    Living in the West of Scotland for most of my life, it always concerned me that decisions about Trident were being made by people in London who didn't have to live beside nuclear subs. Much of Britain is being bought out by overseas companies - but when it comes to something as high risk as nuclear power plants - do we really want these to be controlled by people living thousands of miles away?

  • rate this
    +5

    Comment number 25.

    @16malcplace

    Our government is already outsourced.
    Being bought by the big companies and mainly compromising of rich toffs. They do not represent anyone but themselves.

    This country is a disgrace and I am ashamed to be British.

    Instead of acting like sheep being fleeced left right and center, it is time to stand up for ourselves and do stuff like this ourselves.

  • rate this
    0

    Comment number 24.

    does it matter? if the French and Chinese took their ball back - the on/off switch still remains here :)

    I like it!

  • rate this
    0

    Comment number 23.

    Excellent news.
    We urgently need new nuclear power supply capability and we can't do ourselves.
    We ran down our capability by not having a continuous programme of nuclear power station construction, unlike the French, because our politicians would not stand up to the anti-nuclear "green" lobby.
    Good to see politicians prepared to make hard good decisions in the national interest.
    Alan

  • rate this
    +6

    Comment number 22.

    Simple, our current pseudo dictator and his buddies would sell their own grandmothers if they thought, firstly if there was a profit in it and secondly if they thought could get away with it

  • rate this
    0

    Comment number 21.

    Nuclear power is the only way to energy security for Britain in the future. It's unfortunate that China would never allow us to invest in their nuclear power infrastructure, but since we have no money, beggars can't be choosers.

  • rate this
    +2

    Comment number 20.

    "it will allow the owners of any new nuclear generators to charge well above the current market price for any power they produce in years and decades to come"
    __
    As long as they are 'forced to give me their lowest tariff' I suppose
    Unbelievable

  • rate this
    +17

    Comment number 19.

    Every comment said by every person so far makes absolute sense, but surely it's about time someone in this country stood up for this country and took some action instead of just moaning about it!

 

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