CGNPC, CNNC to help fund new plant in Britain
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 new-technology 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 by Westinghouse.
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," the DECC said. "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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