UK to give 2 bln pound guarantee for Hinkley Point nuclear power

LONDON, Sept 21 (Reuters) - Britain will provide 2 billion pounds ($3.1 billion) of initial support for a new nuclear power station at Hinkley Point in southwest England, Finance Minister George Osborne will announce on Monday in China, which is backing the project.

The price guarantee will pave the way for French utility EDF , and financial partners China General Nuclear Corp and China National Nuclear Corp, to give the go-ahead to the 16 billion-pound scheme later this year, the government said.

"Britain was home to the very first civil nuclear power stations in the world and I am determined that we now lead the way again," Osborne will say on his visit to China, according to a press release.

"Nuclear power is cost competitive with other low carbon technology and is a crucial part of our energy mix, along with new sources of power such as shale gas."

Britain won approval from Europe to guarantee the price of power from the new plant, its first nuclear power station in decades, in a landmark ruling last October.

EDF will receive a guaranteed price of 92.5 pounds per megawatt hour for 35 years for output from Hinkley Point C, which is expected to produce enough energy for around 6 million homes or 7 percent of Britain's needs.

The price will be reduced by 3 pounds if EDF can share costs with another new reactor in Britain.

The guarantee, which is about twice the current wholesale price of electricity, has been challenged by EU member Austria, which says it goes against the EU's aim to support renewable energy.

($1 = 0.6437 pounds) (Reporting by Paul Sandle; Editing by Ros Russell)