Osborne hails UK nuclear deal with China as ‘new dawn’ – FT.com. (source)
George Osborne on Thursday hailed a new dawn for Britain’s civil nuclear programme as he announced a deal between Chinese investors and EDF Energy to build the first nuclear power station in the UK in a generation.
The Chinese General Nuclear Power Group and the French energy company are expected to sign a letter of intent as the two sides finally agree a deal for a planned new plant at Hinkley Point in Somerset.
The main commercial details of the agreement will be announced on Monday by Ed Davey, energy secretary.
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Speaking at Taishan nuclear power station in southern China, Mr Osborne said: “Today is another demonstration of the next big step in the relationship between Britain and China – the world’s oldest civil nuclear power and the world’s fastest growing civil nuclear power.”
The chancellor said it was an “important potential part of the government’s plan for developing the next generation of nuclear power in Britain”.
The first reactor to be built in Britain since Sizewell B began operating in 1995, ministers hope the deal will unlock the construction of several new nuclear power stations across the UK.
British officials have been travelling the world trying to entice investment in new nuclear, relying on French and Japanese technology and Chinese funding to fuel the renaissance of the British industry.
But Mr Osborne’s determination to announce the deal on his trip to China has infuriated Mr Davey, who has done much of the legwork. He travelled to China last month to meet officials ahead of the chancellor’s visit.
“Football fans might say he is the John Terry of government,” remarked one Liberal Democrat on Thursday, a reference to when the Chelsea captain changed into full kit to lift the Champions League trophy – despite having not played in the match. “He [Mr Osborne] was as close to the real negotiations and the work as Pluto is to the earth.”
Mr Osborne sees the nuclear programme as a positive investment story for the UK and spoke of his commitment to building reactors in his recent Conservative party conference speech.
“Should we, the country that built the first civil nuclear power station, say: ‘We are never going to build any more – leave it to others?’ Not on my watch,” said the chancellor.
Under the terms of the deal to be announced on Monday, the government will offer EDF a guaranteed price for the electricity it generates at Hinkley. That “strike price” is expected to be almost twice the present market price of electricity.
The UK government is also offering a financing “guarantee” to attract the private sector into building nuclear reactors.
Ministers are adamant that neither element of the deal is a form of subsidy for civil nuclear power, but the coalition could be in an uneasy position when the deal comes up against EU public subsidy rules in the coming months.
The coalition agreement between the Lib Dems and Conservatives states clearly there will be no government subsidy for new nuclear.
Additional reporting by Guy Chazan
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