[ad_1]
The British government threw its weight behind nuclear power on Tuesday, saying it would back a major new generation plant off the North Sea coast northeast of London.
The government said it would invest 700 million pounds ($839 million) for a 50 percent stake in the plant, called Sizewell C. The French state utility, known as EDF, which will build the plant, will take the rest.
The deal squeezes China’s state-owned company, China General Nuclear, which owned 20 percent of the project. CGN has received an undisclosed sum for its stake, which reflects its value and represents a commercial return on development work to date, the British government said.
The deal is another blow to Britain’s once-warm trade relationship with China. Britain has actively supported Chinese investment over the past two decades, and an agreement to invest in Sizewell Sea was the focus of Chinese President Xi Jinping’s visit to London in 2015 with then British Prime Minister David Cameron. Beijing’s crackdown on Hong Kong and other developments soured relations.
The British government is now wary of Chinese involvement in sensitive sectors such as nuclear power and telecommunications, with concerns that the presence of Chinese companies could lead to security risks.
On Monday, Prime Minister Rishi Sunak emphasized the change, saying the “golden era” in relations with China was over. Britain has been maneuvering to end Chinese involvement in the Sizewell Sea for some time.
The British government and EDF, which has cut its stake from 80 percent to 50 percent, also want to attract investors to the project, which is expected to cost £20 billion or more. A stake held by a company controlled by the Chinese government may complicate that task.
China General Nuclear continues to be an investor in the only major British nuclear power station under construction, at Hinckley Point in southwest England. It has long had plans to build a Chinese-designed plant at Bradwell, not far from London, at some point. That proposal, given the shift away from Beijing, now looks highly unlikely.
Britain is now clearly heading in a different direction, but one that could also prove complicated. Britain’s Chancellor of the Exchequer Jeremy Hunt said in a statement that the government’s decision “represents the biggest step in our journey towards energy independence.”
The government wants to increase the amount of electricity generated from other sources such as nuclear power and wind to reduce dependence on natural gas, now the largest source of power, whose volatility has driven up electricity prices. However, construction at Sizewell C has not yet begun, and it will take a decade or more to make a difference.
The government plans to attract capital to the nuclear industry from asset management firms and other financial market players. To make investment attractive, the government will allow developers to recover costs from bill payers as the project progresses.
The government has touted Sizewell C as a “pipeline” of new nuclear plants that will “enable the delivery of clean, safe electricity for decades to come.” The plant will provide enough electricity for about 60 lakh households, the government said.
However, analysts said Tuesday’s announcement could be just one step on what could be a long and fraught journey. Recent experience in building nuclear plants in Western Europe has resulted in long delays and cost overruns. Hinkley Point C, similar in design to Sizewell C and being built by EDF, is years behind schedule.
“Expect severe delays, significant cost overruns and a severe shortage of skilled workers,” said Frank Gbagudi, senior analyst at Eurasia Group, a political risk firm.
EDF has said it will leverage that experience and trained workforce to cut costs at Sizewell C. Mr. Gbaguidi. However, said EDF could struggle because it is “currently overwhelmed with existing and planned projects in France.”
Indeed, major problems at EDF’s nuclear plants in France have reduced their power output at a time when they are needed to buffer the effects of Russia’s gas cutoffs in Europe.
It may help that nuclear power, long shunned by environmentalists and investors because of the plants’ toxic waste and risks of catastrophic accidents, is enjoying a revival in Britain and Europe. Despite their problems, nuclear plants are a way to generate large amounts of emissions-free electric power.
However, the British government is facing growing concerns about having enough electricity in the future. Britain’s nuclear plants, which last year produced about 16 percent of its electricity, are slowly closing due to age.
[ad_2]
Source link
