Firms want to in­vest in new UK plants

China Daily (Canada) - - BUSINESS - By LYUCHANG lvchang@chi­nadaily.com.cn

China’s nu­clear com­pa­nies are look­ing into the pos­si­bil­ity of own­ing a con­trol­ling stake in a UK nu­clear project, a source at a Chi­nese State-owned nu­clear com­pany said dur­ing a re­cent three-day ex­hi­bi­tion in Bei­jing, Nu­clear In­dus­try China 2014. “The site has not been cho­sen yet, but it will be one of the new sta­tions owned by French power gi­ant EDF (Elec­tricite de France). What we want is to in­vest in a nu­clear sta­tion with a bet­ter lo­ca­tion, if pos­si­ble,” the source from China Gen­eral Nu­clear Power Corp told China Daily on con­di­tion of anonymity.

The Bri­tish govern­ment gave the go-ahead to CGNPC and fel­low nu­clear heavy­weight China Na­tional Nu­clear Corp to in­vest in the $2.6 bil­lion project to build Hink­ley Point C in Somerset, south­west Eng­land, a two-re­ac­tor, 3.2-gi­gawatt sta­tion led by EDF.

But the project was de­layed when the Euro­pean Com­mis­sion started an in­ves­ti­ga­tion in De­cem­ber on whether the UK govern­ment had of­fered fi­nan­cial sup­port for the project, which may be against Euro­pean Union rules.

A CNNC source close to the mat­ter said that as the in­ves­ti­ga­tion winds down in late Au­gust or early Septem­ber, the three par­ties, in­clud­ing CGNPC, CNNC and EDF, are likely to sign an in­vest­ment agree­ment to spec­ify the shares and roles that they will play in the project in Oc­to­ber.

“We want to close the deal as soon as pos­si­ble as it has been up in the air for a long time,” the source said.

Hink­ley Point C will be the first nu­clear plant deal in the EU since the dis­as­ter at Fukushima in Ja­pan prompted a ma­jor re­think of the en­ergy source’s mer­its.

Bri­tain plans to have the first re­ac­tor at the site churn­ing out power by 2023.

“It will be a land­mark deal for China as well,” the source from CNNC said. “The Chi­nese nu­clear firms are able to gain ex­pe­ri­ence in the UK and set up a good rep­u­ta­tion in the global nu­clear mar­ket, lift­ing up the China nu­clear en­ergy es­tab­lish­ment.”

The source from CGNPC said the two Chi­nese com­pa­nies are likely to hold a stake of more than 30 per­cent, while the rest will likely be taken by EDF and French nu­clear en­gi­neer­ing group Areva.

CGNPC— which has been EDF’s long­stand­ing part­ner, along with Areva, in China, in de­vel­op­ing the first two newtech­nol­ogy Euro­pean pres­sur­ized re­ac­tors in Tais­han, Guang­dong prov­ince — will def­i­nitely have a larger stake than CNNC, ac­cord­ing to the source.

But the project that has at­tracted the Chi­nese in­vestors might not pro­ceed as ex­pected, since for­eign me­dia have al­ways ques­tioned Chi­nese com­pa­nies’ abil­ity to build power plants based on so-called third-gen­er­a­tion nu­clear tech­nol­ogy such as Euro­pean pres­sur­ized re­ac­tors and AP1000 tech­nol­ogy, de­vel­oped byWest­ing­house.

Last month, the United Na­tions ac­cused the Bri­tish govern­ment of sus­pi­cious ac­tions over plans to de­velop its first nu­clear power sta­tion in a gen­er­a­tion.

En­vi­ron­men­tal in­spec­tors warned there were con­cerns about a lack of open­ness with neigh­bor­ing coun­tries, in­clud­ing Ire­land, over po­ten­tial risks posed by the Hink­ley Point C plant.

An­a­lysts said the UN’s ac­cu­sa­tions will cast a shadow on the po­ten­tial deal be­tween the Chi­nese in­vestors and the UK govern­ment.

But a rep­re­sen­ta­tive of Bri­tain’s Depart­ment for En­ergy & Cli­mate Change said in an e-mail in­ter­view on Thurs­day that the UK China Me­moran­dum of Un­der­stand­ing on civil nu­clear co­op­er­a­tion “paves the way for in­vest­ment and par­tic­i­pa­tion from Chi­nese com­pa­nies in the UK’s new build nu­clear en­ergy pro­gram.”

“Nu­clear is vi­tal for our en­ergy se­cu­rity now, and we want it to be part of the en­ergy mix in the fu­ture,” theDECC­said. “The UK govern­ment has pre­pared the ground­work for new nu­clear power sta­tions through a pack­age of re­forms and reg­u­la­tory mea­sures that re­move bar­ri­ers to in­vest­ment and give de­vel­op­ers con­fi­dence.”

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