Britain Rethinks Letting China Enter Its Nuclear Power Industry
LONDON – Britain agreed to let China take a stake in its new nuclear power plants a few years ago, believing Beijing had the nuclear know-how and construction intelligence to help replace power plants. aging of the country.
It was a warm moment in Sino-British relations, an agreement signed during a carefully choreographed visit to London by Chinese President Xi Jinping and then Prime Minister David Cameron in 2015.
Six years later, Britain has doubts. Funding for a planned £ 20bn ($ 28bn) power station facing the North Sea, needed to ensure a steady flow of electricity for decades, is unexpectedly questionable. Part of the problem: attracting investors to a project one-fifth owned by China.
Xi’s authoritarian ambitions and his human rights record have cooled relations with Western countries, forcing a broad re-examination of a range of economic relations with the world’s second largest economy.
In Britain, the nuclear power pullback echoes concerns raised last year when Britain joined the United States in banning Chinese telecommunications provider Huawei from high-speed wireless networks for security reasons.
The 2015 nuclear deal even provides for China to own the majority owner of a new power plant project of its own design, on a site about 80 kilometers from London. Although this project goes through regulatory channels, it is expected to meet strong opposition from lawmakers.
“We cannot allow the technological heart of our power system to be exposed to the risk of disruption by states that do not share our values,” said Tom Tugendhat, member of the Conservative Party, led by Prime Minister Boris Johnson, and Chairman of the Parliament’s Foreign Affairs Committee.
China has ambitions to be a global supplier of nuclear power plants, but Britain is not the only country to reconsider a deal.
“In Europe, there is an emerging model of nations rethinking nuclear collaboration with China,” said Ted Jones, senior director of the Nuclear Energy Institute, a Washington-based industry group. He highlighted the recent setbacks suffered by China’s nuclear power plant industry in Romania, the Czech Republic and elsewhere.
Evidence of the risks involved was buried in financial results released Thursday by Electricité de France, a French utility company that owns and operates Britain’s eight operating nuclear power plants. The company is halfway through the construction of Britain’s first new power plant since the 1990s, at Hinkley Point, in the south-west of England, a project third-party owned by China General Nuclear, the nuclear company of Chinese state.
EDF, in its quarterly results, urged the UK government to quickly pass legislation allowing for a new, less risky financial and regulatory package before embarking on the North Sea project near a fishing village called Sizewell.
Failure to get those changes, the company said, could cause it to “not make an investment decision” – in other words, to walk away from the project.
“This legislation is now really, really essential,” Simone Rossi, managing director of the UK branch of EDF, said in June, according to Reuters. British officials and EDF executives are negotiating the financing conditions for the Sizewell project.
Daily business briefing
EDF, majority owned by the French government, says it does not have the means to pay the costs of the project in advance and wants to reduce its 80% stake to a minority stake to make room for other investors.
The envisaged arrangement would allow investors to obtain an immediate return on the capital they spend on the plant through surcharges on energy bills. Pension funds, university foundations and similar investors would likely be drawn to predictable, long-term income streams, analysts said. “You will find interested investors,” said Meike Becker, utilities analyst at Bernstein, a research firm.
The crucial question, however, is whether the presence of China General Nuclear could give financial institutions, especially those in the United States, pause for thought.
In 2019, the company was placed on a U.S. government blacklist – which bars U.S. companies from doing business with it – for engaging in efforts to acquire advanced U.S. nuclear technology for military purposes. In 2016, an American nuclear engineer was sentenced to two years in prison for helping the company develop nuclear materials.
“CGN has a particularly bad reputation in the United States,” said Vincent C. Zabielski, London-based special advisor specializing in nuclear issues at Pillsbury, a law firm. Mr Zabielski said that while investors might find CGN to bring valuable engineering skills to the construction of the plant, the company’s presence could be a drag for US investors “in some cases.”
China General Nuclear declined to comment.
Ultimately, the government will decide the fate of Britain’s nuclear program; one option that would be on the table is for the UK government to buy China’s stake in the Sizewell project. In principle, the government wants at least one more power plant after Hinkley Point to help it meet its ambitious low carbon targets. The Sizewell plant will generate enough electricity for millions of homes for decades. Building a new factory would also create thousands of jobs and provide billions of pounds of work for UK suppliers.
China’s global nuclear ambitions are at stake in Britain. Its plans for a nuclear power plant outside London, at Bradwell-on-Sea, are in the process of being approved by Britain, a critical step which Beijing says would be a stepping stone towards its acceptance in other international markets. .
China “is making every effort to set Chinese standards” in the global nuclear industry, said Mark Hibbs, senior researcher at the Carnegie Endowment for International Peace. If China succeeds in Britain, he said, it would give the country a competitive edge in global nuclear sales for decades.
But the British government has soured on Beijing over a multitude of concerns, from the crackdown on dissent in Hong Kong, a former British colony, to the harsh treatment of Uyghurs in Xinjiang province. Influenced by Washington, concerns have also grown in London about the security risks associated with the use of Chinese technology.
Industry sources say it is now difficult to conceive of the government approving a Chinese-designed, majority-owned design plant not far from London, as planned for the Bradwell project.
The situation may be different at Hinkley Point, where the Chinese company’s stake is 33%, and at the proposed Sizewell project, where its stake is 20%. Overall, China General Nuclear has spent around £ 4 billion on UK projects. Mr. Tugendhat said he had no objection to Chinese money in these cases because it could be easily replaced.
#Britain #Rethinks #Letting #China #Enter #Nuclear #Power #Industry