Britain finally gave the go-ahead on Thursday for Hinkley Point, its first nuclear plant in a generation, but set conditions to address concerns over China’s role in a flagship project for Europe’s nuclear sector.
The announcement, welcomed by its French and Chinese backers, came two months after Prime Minister Theresa May caused shockwaves by ordering a review of the £18 billion (21 billion euro, $24 billion) deal brokered under her predecessor, David Cameron.
China has a one-third stake in the project and analysts had warned that Britain could have jeopardised relations with the world’s second-largest economy if it scrapped the deal while critics said it could give China the power to turn off the lights.
Jean-Bernard Levy, chief executive of the French state-owned power company EDF, said the move “relaunches nuclear power in Europe”.
EDF’s board had already approved its participation in the project in south-west England in July when May’s government suddenly announced it was pausing it.
“We have decided to proceed with the first new nuclear power station for a generation,” Britain’s Business Secretary Greg Clark said in a statement, while pledging fresh measures “to enhance security”.
He told parliament that the plant’s construction would create 26,000 jobs and guarantee seven percent of Britain’s electricity needs for 60 years.
It will be “a huge boost to the economy”, he said. One of Downing Street’s prime concerns was over the security implications of allowing China to take such a large stake in a critical infrastructure project.
Beijing’s state-run China General Nuclear Corporation (CGN), the Chinese investor in Hinkley Point, was also set to take the lead in the Bradwell power station project in Essex in south-east England.
But Clark’s ministry explained the government was taking steps to ensure it could intervene to stop any sale of EDF’s stake and to give the government more control over future nuclear projects.
Olivia Gippner, a fellow in EU-China relations at the London School of Economics, said the framework was aimed at China but “by introducing a general national security test rather than focusing only on Chinese investment, this is a very diplomatic solution”.
CGN said in a statement on social network Weibo it was “delighted” at Thursday’s announcement and would now “move forward and deliver” on Hinkley Point, as well as the Bradwell plant.
“The Bradwell plant will be significant since it signifies a shift in the bilateral relationship,” Gippner said.
“As China was developing its own nuclear industry, it first used European and US technology and safety standards.
Bradwell would mean exporting the Hualong One reactor type to Europe for the first time”. CGN is set to finance £6.0 billion of the cost of the Hinkley Point plant, with EDF providing the remaining £12 billion.
EDF’s share price was down 1.5 percent in afternoon trading on the Paris stock exchange following concern about how the company will fund construction.
But French Prime Minister Manuel Valls hailed the deal as “excellent news” for France’s nuclear sector and domestic employment. -AFP