State-owned China General Nuclear Power Group is demanding a greater say in the running of any future nuclear power plants its finances in the UK, after talks with France’s EDF to partner up on a possible £14bn new plant at Hinkley Point in Somerset. Industry insiders predict that CGN is using Hinkley Point as a stepping stone to push for greater control over future projects, such as one of two new reactors also planned for construction by EDF, this time at Sizewell in Suffolk.
It is thought that the Chinese could seek to become joint operators of this plant, causing much unease for the government, who have already said Chinese companies should only be able to take a minority stake in sectors of the economy which are of national importance, such as energy.
This follows an attempt last year by Chinese companies to bid for Horizon, a nuclear project with plans to build reactors in Oldbury, Gloucestershire and Wylfa, Anglesey, which was put up for sale by its then-owners, German utility companies Eon and RWE. Tory MP Mark Pritchard, a member of the parliamentary joint national security committee said at the time: “Using a communist-backed, state-owned Chinese company will create major security concerns.”
The bid was ultimately won by Hitachi of Japan, but it doesn’t mean Chinese investments aren’t currently growing elsewhere in the UK’s energy and infrastructure sectors. The UK’s largest water supplier, Thames Water, last year saw a 9 per cent stake bought by China’s sovereign wealth fund, while the Chinese National Oil Company, CNOOC, also acquired Nexen, in a deal worth $18bn, giving it stakes in a number of North Sea oil fields.
Despite the government’s misgivings, there is a looming energy crisis heading for Britain if it doesn’t start finalising plans to meet its future electricity needs as older out-of-date power plants close. It needs to attract investment in a new generation of nuclear reactors wherever it can get it, especially as costs have risen in the industry following Japan’s Fukushima disaster.
The Horizon project, which has already changed hands once from Eon and RWE to Hitachi, and with EDF now reducing its 80 percent stake in the Sizewell plant with the help of CGN, it is clear that few a willing to take the big risks involved in the huge costs of financing nuclear new builds. There are relatively few competing reactor designs available and companies with the means and the motivation to build them, so the government could yet find itself accepting greater Chinese help in future.
How CGN uses its involvement in Sizewell as a springboard to future projects in the UK remains to be seen, but the French and Chinese nuclear industries are already closely linked, so further partnerships could be on the cards. French-owned reactor manufacturer Areva, plus CGN, were one of the consortiums bidding for the Horizon project last year, and the pair are already working on a number of reactors together in China.
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