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Hinkley Point Nuclear Plant Will Go Ahead, Britain Says Hinkley Point Nuclear Plant Will Go Ahead, Britain Says
(about 5 hours later)
LONDON — The British government announced on Thursday that it would push ahead with a contentious deal to build a nuclear power station financed in part with French and Chinese investment, but only after making changes intended to address security concerns. LONDON — After delaying a project to build a nuclear power plant with Chinese investment, Britain’s government on Thursday gave the go-ahead for the plant, but insisted on new conditions designed to protect the security of critical infrastructure.
Britain, which angered its international partners by postponing a final decision on the $24 billion Hinkley Point C project in July, said in a statement that the government would take a “special share” in any nuclear projects built in the future. The decision ended weeks of uncertainty that had strained relations with China, which is financing more than a third of the $23.7 billion power station, and with France, whose largely state-owned energy giant EDF is paying for the bulk of the project.
Although the statement made no reference to China, it almost certainly had the Beijing leadership in mind when it noted that the changes would ensure that “significant stakes cannot be sold without the government’s knowledge or consent.” By pressing ahead with the Hinkley Point C nuclear power plant on the Somerset coast of England, Prime Minister Theresa May appears to be open to greater involvement by China in Britain’s energy industry. China also wants to build and operate a nuclear plant of its own design at another British site, at Bradwell-on-Sea, in Essex.
The government will also add a review of any deal for national security implications, and the revised terms mean that Britain will have a much greater say if EDF, the largely state-owned French company that is the main investor in the plant, wishes to sell its stake in the plant to a foreign buyer. Mrs. May said in July that her government would not yet sign off on the Hinkley Point deal, reportedly on security and economic grounds, deciding instead to review the plans for the new power plant. It was one of her first big political moves after succeeding David Cameron as prime minister, and was seen as a sign that she was uncomfortable with some aspects of Mr. Cameron’s aggressive pursuit of an economic partnership with Beijing.
The delay, which was ordered by Prime Minister Theresa May shortly after she took office, was seen as a calculated shift away from the ties with Beijing that her predecessor, David Cameron, had cultivated. He often courted China despite geopolitical, security and human rights concerns. In recent weeks, Mrs. May has upended a variety of Mr. Cameron’s domestic policies. She has abandoned his financial targets and, most recently, overturned his education policy by advocating for allowing selective admissions in schools.
Mrs. May decided to review the construction of the nuclear power plant in Somerset, even though the costs of canceling the project at such a late stage would have been considerable: EDF would have claimed compensation after spending large amounts on development and construction, trade with China would have almost certainly suffered, and Hinkley is crucial for Britain to avoid an energy shortage in the future. Thursday’s decision suggested that the price of any significant policy shift on the Hinkley project would simply have been too high.
“Britain needs to upgrade its supplies of energy, and we have always been clear that nuclear is an important part of ensuring our future low-carbon energy security,” Greg Clark, the secretary of state for business and energy, said in the statement. If the project did not proceed, the French energy firm, EDF, would have made claims to be compensated for development and construction; trade with China would have almost certainly suffered; and Britain would have lost out on the Hinkley plant’s production, expected to be able to cover 7 percent of the country’s electricity needs. And with around 26,000 jobs at stake, British trade unions were campaigning for the power station to go ahead.
The delay in approving the new nuclear plant, which would be the first built in a generation, also caused tension with the French government because EDF had approved funding for the project despite serious concerns about the company’s ability to absorb the huge costs. Britain’s energy secretary, Greg Clark, promised on Thursday that the government “will introduce a series of measures to enhance security and will ensure Hinkley cannot change hands without the government’s agreement.”
Michel Sapin, the French finance and economy minister, said in a statement that the decision “is a major step in French-British industrial and energy cooperation.” “After Hinkley, the British government will take a special share in all future nuclear new build projects,” he added.
After the delay was announced, Xinhua, the Chinese state news agency, said in a commentary published in response to the announcement of the review that the decision added “uncertainties to the ‘Golden Era’ of China-U.K. ties.” That announcement seemed designed to increase British control over critical aspects of national infrastructure, similar to those exercised by the Committee on Foreign Investment in the United States.
“China can wait for a rational British government to make responsible decisions,” the commentary said, “but cannot tolerate any unwanted accusation against its sincere and benign willingness for win-win cooperation.” After the delay to the Hinkley project’s approval was announced in July, Xinhua, the official Chinese news agency, said in a commentary that it added “uncertainties to the ‘Golden Era’ of China-U.K. ties.”
China is providing financing for about one-third of the Hinkley Point project, but the original deal would have allowed the country to build and operate a nuclear power plant of its own design at another site in Britain, at Bradwell-on-Sea, in Essex. China General Nuclear Power Corporation, the state company that invested in the Hinkley Point project, said in a statement that it expected that deal to proceed, “China can wait for a rational British government to make responsible decisions,” the editorial said, “but cannot tolerate any unwanted accusation against its sincere and benign willingness for win-win cooperation.”
Two plants would give China an important stake, and potentially a measure of control, over a significant part of Britain’s energy supply. With its huge economic muscle, China is a formidable trade partner for Britain, particularly after Britain’s vote to quit the European Union. Mrs. May’s government is hoping to boost trade with non-European partners. She and President Xi Jinping of China met at the gathering of Group of 20 leaders this month in Hangzhou, China.
Mrs. May met President Xi Jinping of China at the meeting of Group of 20 leaders this month, and she may have received direct reassurances from him, perhaps over security concerns. On Thursday, China’s CGN, which is one of the partners in the Hinkley deal, said it was “delighted that the British government has decided to proceed with the first new nuclear power station for a generation.”
Environmentalists have criticized the project to build the Hinkley plant, which is intended to produce 3,200 megawatts — enough to power six million homes, or about 7 percent of Britain’s energy needs — with two new French reactors at a cost of at least 18 billion pounds. Michel Sapin, the French finance and economy minister, said in a statement Thursday that the decision was “a major step in French-British industrial and energy cooperation.”
Opponents of the power plant argued that it represented poor value for money and that British taxpayers would end up paying higher prices for energy. However the opposition Labour Party in Britain dismissed the new security safeguards announced by the government as “window dressing,” saying that most of the protection they afforded could already be achieved under existing legislation.
British trade unions had also criticized the decision to delay the project, mindful of the jobs that would have been at risk. Critics of the Hinkley project said the British government had ignored the biggest failing of the project: It is a bad deal for the money.
In exchange for building the plant, EDF has been guaranteed 92.50 pounds (about $120) for every megawatt hour of electricity produced, rising with inflation, for 35 years — equivalent to more than twice the current wholesale price of electricity.
In a Twitter post, Caroline Lucas, a lawmaker and co-leader of the Green Party, described the decision as “stunningly short sighted,” adding: “We need clean, renewable energy not an outdated, overpriced white elephant.”