Britain yesterday gave the go-ahead for a US$24 billion nuclear power plant, ending weeks of uncertainty that strained ties with China and France, and put a question mark over British Prime Minister Theresa May’s investment policy.
In a statement, May’s government said it had decided to proceed with the Hinkley Point C project in southwest England after a comprehensive review, but made it clear Britain would have greater control over future deals when foreign states were involved in buying stakes in “critical infrastructure.”
May stunned investors by putting Hinkley on hold in July, just hours before a deal was to be signed, saying she needed time to assess the project under which French utility firm EDF would build Britain’s first new nuclear reactor in decades, backed by US$8 billion of Chinese cash.
Photo: AFP / EDF Energy
“Having thoroughly reviewed the proposal for Hinkley Point C, we will introduce a series of measures to enhance security and will ensure Hinkley cannot change hands without the government’s agreement,” British Secretary of State for Business, Energy and Industrial Strategy Greg Clark said in a statement.
“Consequently, we have decided to proceed with the first new nuclear power station for a generation,” he said.
The statement said the government would be able to stop the sale of EDF’s controlling stake before completion, without the prior notification and agreement of ministers.
Critics of the deal had expected Britain to try to renegotiate the price, which they say was set too high before oil prices fell, dragging energy costs lower.
However, the statement said the price had not changed for the energy which is needed to fill a supply gap as the country’s coal-fired plants are set to close by 2025.
The decision to go ahead with Hinkley goes someway to easing concerns that May, a former home secretary, was closing the door to foreign investment, particularly from China.
According to a former colleague, former British secretary of state for business Vince Cable, May had expressed concern at the “gung-ho” attitude that former British prime minister David Cameron took toward courting Chinese investment.
The Chinese Ministry of Foreign Affairs did not immediately respond to a request for comment.
However, the Chinese company set to invest US$8 billion in the plant welcomed the decision and was not concerned by the new rules around future foreign investment, a source close to the deal said.
“They welcome the government’s decision, they are very happy with it and it enables them to proceed with investment in and development of new nuclear stations in the UK,” the source said, on the condition of anonymity.
There were also questions about whether the French investor was able to conclude the project after delays on similar schemes and board-level concerns about the high up-front costs for the project.
However, an aide to French President Francois Hollande said May had called the French leader to say “she supported the launch of the Hinkley project.”
However, the new controls might affect future deals with foreign energy partners. The government said it would take a “special share” in all future nuclear new construction projects to ensure that significant stakes cannot be sold without its consent.
EDF and China General Nuclear Corp plan to build and operate a new nuclear power station at Bradwell-on-Sea in Essex, southeast England. Bradwell would be a Chinese-led project, using Chinese technology.
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