Going nuclear: UK's deal with China

 
George Osborne chats with Taishan Nuclear Power General Manager Guo in front of nuclear reactor under construction in Taishan (17 Oct 2013) George Osborne sees Chinese involvement in Britain's nuclear industry as a great opportunity

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Perched high on top of one of the giant new reactor buildings under construction at Taishan we had a view over the entire site.

It's one of the biggest nuclear plants of its kind in the world: six reactors being built on the edge of the South China Sea.

In front of us construction cranes encircled the egg-like shape of another huge, grey concrete reactor shell. They swung lazily back and forth.

Teams of workers were welding metal bars in place. Everything looked incredibly orderly.

George Osborne, the UK chancellor, looked impressed. Mr Osborne had just announced that he will welcome Chinese participation in building nuclear power stations in Britain.

Mr Osborne's host, Zhang Shan Ming, the general manager of the China General Nuclear Power Group (CGN), obviously keen to stress the safety features of the reactor, was explaining why the concrete casing was so thick.

"It's against air traffic crash," Mr Zhang said.

"Right," the UK chancellor replied. "Special safety procedures."

"An earthquake, or tsunami, or typhoon, you are prepared for that?" Mr Osborne asked.

"The design is prepared for this," he was told.

Damian Grammaticas explains why China is key to Britain's nuclear plans

Britain's chancellor seemed reassured, as he needs to be, given that a near replica of Taishan is now likely to be built at Hinkley Point in Somerset in the UK at a cost of around £14 billion ($22bn) by a similar consortium to that working in China.

Taishan uses European-designed reactors built by a partnership between the French firm EDF and China's CGN. It's one of almost 30 new nuclear power plants China is building or planning to build.

China has not had any major accidents at its nuclear power stations, and says its safety record is good.

But there are concerns that, in the dash to build so many new reactors, and use indigenous Chinese technology in some, safety could be compromised.

'Lack of transparency'

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 about partnering with China's nuclear operators.

"My first concern would be the lack of transparency," says Prentice Koo, senior campaigner at Greenpeace.

"Their track record is really bad. For every incident in a nuclear power plant in China, they only provide a very brief report, and all it says is how they solved the problem," he says.

George Osborne talks with workers as they collect food at a canteen near Taishan (17 Oct 2013) George Osborne was happy to sample the food at the workers' canteen

"They never give the reason for the incident."

His second concern is whether Chinese companies would actually pay up if they were found liable for any incident that happened to a reactor they had built overseas.

"The nuclear industry in China enjoys such a privileged position that they have to pay only very limited sums in compensation if there is any major incident," explains Mr Koo.

"Overseas they'll be required to pay a lot more... it'll test the ability of China's nuclear industry to pay up."

At Taishan, though, they were keen to point out not only their safety features, but also how transparent they are.

Dong Shi Ming, a public relations officer, said it was so open that members of the public could come and visit the site - all they had to do was apply for an organised tour.

He claimed thousands had already done so.

Questions

Is China's nuclear industry safe or not? Is it really transparent? They're important questions.

Involvement in the UK will test China's firms. It may even force them to be more transparent.

The only other place where China has built reactors so far is in Pakistan.

Some in the West will be deeply uncomfortable at the prospect of Chinese state-owned firms being involved in the building and running of UK nuclear plants.

After all, China remains an authoritarian state, its nuclear firms answerable, ultimately to the Communist Party.

For now they are to be minority players in the UK. But one day they may have control over some of Britain's strategic energy supplies.

George Osborne talks with workers at Taishan power plant (17 Oct 2013) Taishan is one of the biggest nuclear plants in the world

Others, like George Osborne, see a great opportunity.

As one member of the British delegation explained to me, deeper commercial engagement will give China a bigger stake in Britain's success. Britain's goodwill in opening up to Chinese firms could engender better ties and reciprocal opportunities for British firms in China's nuclear industry.

'Balanced'

The UK is already a major investor in China through oil firms like Shell and BP.

Getting China to invest more in the UK makes the relationship more balanced, the argument goes.

China now has stakes in Britain's oil and gas industries; nuclear opens a major new area to it.

Some of this boils down to long-running arguments: Is it better to engage China or to be cautious? Is it wise to draw it into a deeper relationship with the outside world or be wary of the intentions of its opaque Communist rulers?

At Taishan George Osborne has taken a big, some might worry risky, step: he's gone nuclear.

 
Damian Grammaticas, China correspondent Article written by Damian Grammaticas Damian Grammaticas China correspondent

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  • rate this
    0

    Comment number 455.

    We need clean, safe and cheap power but we are, essentially, broke. Nuclear power(and probably fracking!) is the answer(and always has been) and we need the cash. The Chinese have the cash(coz WE bought all their cheap goods), and the knowhow and are investing in the UK. The same people who moan about this probably buy their cars, washing machines and most they own from foreign companies.

  • rate this
    0

    Comment number 454.

    Surely, Hong Kong is part of China, not a totally separate country?
    Would the Chinese companies bring their own workers now that George Osborne has said they do not need visas to enter the UK?
    Will the power companies still be able to say that the Chinese are driving up the energy costs, even though it would be nearly impossible to supply China with electricity that was produced in the UK?

  • rate this
    0

    Comment number 453.

    Dear 445 are you spying on anyone else? Oxfam in Sheffield do a nice line in jumpers. This comment box seems to go on and on yet other subjects seem to be closed after a few taps. All that could be said seems to have been said... the Chinese Reactor and Hs2 overwhelmingly are not wanted if this Blog is anything to go by. I wonder if this result could represent the peoples views? Do Politicians read this? would it make a difference if they did? Thanks Aunty....makes me feel better anyway!

  • rate this
    0

    Comment number 452.

    The traditional notion of a nation state is outdated in the modern world. Certainly to major corporations it has become something of an irrelevance, merely a landscape of tax laws to negotiate. The fact these are "Chinese" companies really is quite irrelevant. We should be seeing the role and cost of states reducing in this environment, but instead we see the opposite as they fight for their survival by infringing on the rights and privacy of citizens.

  • rate this
    +1

    Comment number 451.

    Capitalism is bankrupt, this is a triumph for Communism.

    Yogurt weavers concerned about safety issues haven't found a better way to keep the lights on. They even complain about wind farms.

  • rate this
    +1

    Comment number 450.

    England no longer belongs to the English as our governments have sold us out to every country that shows there wallet just for a quick buck.
    The future prospects for the English seems very grim and sad....

  • rate this
    +1

    Comment number 449.

    Any chance the Chinese could build HS2 at half the cost and twice as quick as it costs the Government to pay their consultant buddies to write reports for months on end telling us how HS2 will transform the economy? We have the skills to build track and nukes and although management corruption is also a Chinese skill when it comes to incompetence in managing big projects and ripping off the taxpayer we can teach them a thing or two. Watch and learn and fill your boots China. PS want some Royal Mail shares or a Rail Franchise?

  • rate this
    +2

    Comment number 448.

    If the Chinese project manage and build this and the uk checks the health and safety it might be up and running before we get a new runway for London and on budget - sad isn't it?

  • rate this
    0

    Comment number 447.

    Maybe china might make somthing reasonably safe. Just make sure it is though beacuse britain is a relatively small country. If somthing goes wrong we can't exactly run away from it!
    But my problem is that many people will be paying money to chinese compainies that will send money over to china. Not that they won't spend the money well but at the end of the day we are paying more money to overseas companies but not making any money over here from other countries. Could that cause a problem with our economy?

  • rate this
    +2

    Comment number 446.

    @407 you are right. In 2015 we have a choice between the current lot and the mess they are making... or ... the old lot who got us into this mess, they haven't even changed the personnel in the cabinet positions.
    I want a proper choice when I vote and Party politics is no choice. I want something from all of them, not to the right or left but a mix of both

    Perhaps we should ban Political parties and make everyone stand as Independents so people can vote for them on what they stand for and offer some choice

  • rate this
    0

    Comment number 445.

    Gas turned off in June- can't afford "British" (Ha!) Gas's prices now. Hope I don't need heat until January - still "owe" them nearly 300 from LAST winter (allegedly) Everyone needs to TURN OFF and visit charity shops for extra jumpers..That'll show 'em....

  • rate this
    +1

    Comment number 444.

    Fourteen billion is £220 per person. I'll write you my cheque now, George. How many power stations are required? I'll write you another cheque next year.

    Finance, budgets, politics, policy, and in truth government is so sophisticated and complicated these days that it left the planet, quite some time ago.

  • rate this
    +1

    Comment number 443.

    I remember in the late 80s when Thatcher's government supported major UK companies such as GEC to win contracts to build turbine generators for two electricity power plants in China.

    Now this government are chasing the Chinese (i.e their money) to build Nuclear plants here? Why not use the billions wasted on QE and the 50 or so billion set for HS2 to build at least two nuclear power plants using the exeprtise of British engineers. Is that too simple for our politicians to understand?

  • rate this
    +1

    Comment number 442.

    UK has an exponential problem as real incomes stagnate. Argue, argue, argue rubbish but incomes are falling in real terms and this is going to continue. There will not be an economic miracle. Consumption of energy will decline as its price expands in triple whammy.

    Once enough people can no longer afford energy, happening now, all political parties are stuffed over the grid and grand designs. It isn't going to work as things stand and are being planned for. The required investment was frittered sway during the last 20 years. Privatisation, home to roost.

  • rate this
    +1

    Comment number 441.

    Economic policy is rebalancing our economy and this has been overlooked. The rebalance is of incomes. Around the time new plant comes on stream, a huge proportion of our population will be burning wood and coal for heat and energy, and the great economic enterprise which is our power grid will be bankrupt.

    So it will be, there is a big fuss over energy and no realism about the countries prospects. Incomes are falling by design across a broad front and this will continue. It will not improve and consumption energy consumption will shrivel. Price will gow regardless. Bankruptcy by design

  • rate this
    0

    Comment number 440.

    New World Order

    New New New New New
    New World Order

    if by chance you ever try to resist
    then they brand you terrorist
    then you cannot be a planter
    so you can never be a reaper
    and if you can't be a buyer
    how you ever gonna be seller
    in their new world order
    click click click
    here comes the computer with the triple six
    rasta travelled them road
    I & I is aware of their bar code

    them lock off all their border
    system is getting out of order

    every time they hit below the belt
    they come to steal all your wealth

    http://www.youtube.com/watch?v=BKYNybNZ6Tc

  • rate this
    +3

    Comment number 439.

    Turns out the Tories not only sold the country's utilities, they also sold the country's dignity!

  • rate this
    0

    Comment number 438.

    Exchanging Business Ideas and Working Together is much more productive than cheap insults any day globally and locally minority and majority together proportionally equally and respectfully spliffically heartically http://www.youtube.com/watch?v=pcfIpDA4LZ0

  • rate this
    0

    Comment number 437.

    Ok, now get this. The UK cannot or will not invest in its domestic energy market infrastructure. Therefore, as in foregone conclusion, costs will treble. Our frogs will eat rice and we have the wonderful prospect of kwok up.

    China's knowhow and economy are a disaster that has not materialised yet. I really hope and pray someone put a lid on prices.

    We can't afford to build the plant so why does anyone beliebe consumers will be able to pay for it.

    God help us but he's probably contracted in the margins.

  • rate this
    +1

    Comment number 436.

    The UK should simply worry. About everything since our own financial wizards are now so entirely screwed up and policy of two decades so completely screwed up, that UK will not invest in its own energy needs.

    Think about that, next time you pay for gas and eclectic.

    Utter complete something or other that belongs in the bin. Well done. Oh so spendidly and utterly splendid.

 

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