London - UK Chancellor of the Exchequer George Osborne pledged to increase cooperation with China and build new nuclear power stations in Britain, which he says are “crucial” to the country’s energy mix.
The UK government will provide a guarantee of 2 billion pounds ($3 billion) for building the Hinkley Point C nuclear power station in southwest England, Osborne said Monday on a trip to China. The money, which will be provided through Infrastructure U.K., may be the first tranche of a number of similar guarantees and “pave the way” for a final investment decision by Electricite de France SA, supported by China General Nuclear Corp. and China National Nuclear Corp.
“Nuclear power is cost competitive with other low carbon technology and is a crucial part of our energy mix,” Osborne said in a statement. “I am delighted to announce this guarantee for Hinkley Point today and to be in China to discuss their investments in Britain’s nuclear industry.”
Britain reached a deal with EDF in October 2013 to build the nation’s first reactor since 1995, agreeing on loan guarantees to cover construction costs and a fixed power price for 35 years.
The agreement between the UK, France and China stipulates Chinese partners will pay for Hinkley and another nuclear plant in Suffolk, according to a report Monday by the Financial Times. In return the Chinese will receive a controlling stake in Bradwell, a new plant being planned in Essex, the paper said.
First reactor
“Britain was the home to the very first civil nuclear power stations in the world and I am determined that we now lead the way again,” Osborne said.
The 24.5 billion-pound project is key to UK plans to cut carbon emissions and maintain security of its power supply so that electricity generation doesn’t depend on intermittent sources of renewable energy such as wind farms and solar plants.
“The chancellor’s approval of the infrastructure guarantee is a clear sign of the government’s commitment to Hinkley Point C,” EDF CEO Vincent de Rivaz said in the government statement. “It is further progress towards a final investment decision on a project which will provide reliable, affordable low carbon electricity for decades.”
BLOOMBERG