Yahoo Finance Osborne Signs Nuclear Power Deal With China
Britain's next generation of nuclear power is almost certain to be funded in part by the Chinese following an agreement between governments and operators in the UK and China.
The announcement was made by the Chancellor George Osborne on a visit to China's Taishan Nuclear Power plant in Guangdong, 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 agreement will almost certainly mean that a new reactor, already planned for Hinkley Point in Somerset, will be a mirror image of the Taishan plant in China.
The terms of the contracts with China and detailed figures for the proposed Hinkley Point project, including the so-called strike price between the companies and governments, are expected to be announced in the UK next week.
However, the broad agreement outlined by Mr Osborne will allow a consortium of French and Chinese firms to build the plant using a proportion of Chinese cash.
China's state-owned China General Nuclear Power Company (CGN), French energy company EDF (Paris: FR0010242511 - news) and the nuclear firm Areva already work together at the Taishan plant, which is due for completion later this year.
Mr Osborne was given a tour of the Taishan plant, where he climbed up one of the unfinished nuclear reactors with CGN general manager Zhang Shanming and the CEO of EDF, Vincent de Rivaz.
"It is an important potential part of the Government's plan for developing the next generation of nuclear power in Britain," he said.
"It means the potential of more investment and jobs in Britain, and lower long-term energy costs for consumers."
China has the largest new nuclear power construction market in the world. It currently has 17 operating nuclear reactors, with a further 28 under construction.
UK treasury officials, travelling with the Chancellor, have been keen to stress the safety record of the Chinese civil nuclear industry and also the strict regulations under which the Chinese must operate.
"Any investment from any country has to comply with rigorous regulatory standards for safety and security," an official said.
Reports that China has asked for a future licence to operate nuclear power plants in the UK in return for their investment have not been confirmed by British officials.
Today's agreement followed a Memorandum of Understanding (MoU) signed in Beijing on Tuesday between Mr Osborne and his Chinese counterpart Ma Kai on civil nuclear co-operation.
The potential importance of a nuclear future was underlined by a report warning that Britain faced a higher risk of power shortages over the next five years as old generating plants began to close.
The Royal Academy of Engineering (Milan: ENG.MI - news) predicted that capacity would be stretched "close to its limits" from next winter by unexpected events like prolonged cold weather and unplanned plant outages.
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