Ministers close to an agreement that could end China’s role in the UK nuclear power plant | Nuclear power

Ministers are nearing an agreement that China could launch a project to build a £ 20 billion nuclear power plant on the Suffolk coast and instead pump in tens of millions of pounds of taxpayers’ money – a move that would add to geopolitical tensions.

As early as next month before the Cop26 climate summit, the government could announce plans to participate in the Sizewell C power plant alongside the electricity giant EDF, which is supported by the French state.

This would likely result in China General Nuclear (CGN), which currently has a 20% stake in Sizewell, being removed from the project.

It risks sparking political tensions that will escalate following the UK’s decision to join the Aukus nuclear-submarine pact with the US and Australia – a move intended to counter China’s military expansion. CGN, the communist state-backed electricity giant, also funds EDF’s Hinkley Point C power plant in Somerset.

Still under design and development, Sizewell would eventually power 6 million homes, but has been plagued by opposition from local activists, fears about its price, and China’s involvement.

Washington has relied heavily on Westminster to remove China from Britain’s nuclear plans, blacklisted CGN, cited national security fears and accused of stealing military technology – claims it denies. Former US Secretary of State Mike Pompeo last year urged the UK to choose either side in the fight to develop nuclear technology, saying it was “ready to help our friends in the UK with any needs they may have “.

According to the plans for Sizewell, which are being discussed by Whitehall officials and EDF, the government could get involved in a development company that would guide them through various stages of planning and bureaucracy and share the costs with EDF.

Private investors like insurance funds L&G and Aviva would then be lured in at a later date in exchange for a government-backed funding model called the regulated asset base (RAB), which dilutes the taxpayer and EDF. RAB funding legislation – the same model used to fund airports like Heathrow and water companies – is slated to be brought through Parliament next month.

EDF’s board of directors is due to hold a meeting in November to discuss moving Sizewell forward, but is believed to be cautious about pumping tens of millions into the project without a firm commitment from Westminster.

EDF has advocated a RAB mechanism extensively, arguing that it could bring the “strike price” – the guaranteed price of Sizewell’s electricity – down to £ 30 to £ 60 per megawatt hour. Hinkley’s exercise price of 92.50 MWh has been criticized as excessive at a time when offshore wind costs are falling.

All but one of the UK’s eight existing nuclear power plants, which provide up to 20% of electricity, are slated to close by the end of the decade, creating a large gap in low-carbon electricity generation.

The global gas crisis and rising energy costs have put pressure on ministers to act, and ministers are keen to announce an agreement on Sizewell ahead of the Cop26 climate summit in Glasgow in November next month. Economics minister Kwasi Kwarteng is expected to urge the finance ministry to spend a large part of its spending on nuclear power in its October 27 spending review.

Ditching Sizewell’s China would effectively tear apart the government’s 2015 contract with CGN agreeing to fund Hinkley and Sizewell, and then install their own reactors at a third location in Bradwell, Essex. The chances of CGN obtaining approval to build its reactor in the UK are considered slim. This deal was seen as the culmination of the “golden era” between Britain and China.

Pressure to remove China has increased under Joe Biden’s administration. Executives at US construction giant Bechtel have teamed up with Westinghouse, the US nuclear technology company owned by Canadian company Brookfield, to develop another nuclear power plant in Wylfa, Anglesey.

In their pitch before the government, they said the project would strengthen the “special relationship”. “By successfully partnering at Wylfa, the UK and US will have a shared interest in promoting the use of this safe, reliable technology in new markets to compete against government-sponsored Russian and Chinese options,” they wrote.

Stephen Thomas, Professor of Energy Policy at Greenwich University, said, “CGN’s motivation in supporting the Hinkley Point and Sizewell projects was to secure the opportunity to build their own reactor design in Bradwell. With Bradwell off the table now, it is unlikely that they would be interested in the Sizewell investment.

“CGN may still stick to approving its reactor design with the UK authorities to obtain this gold standard accreditation, but that’s where its UK nuclear ambitions will likely end,” he said.

CGN and EDF declined to comment.

Business said, “Nuclear power is key as we work to reduce our dependence on fossil fuels and the risk of volatile global gas prices.

“CGN is currently a shareholder in Sizewell C pending the final investment decision by the government. Negotiations are ongoing and a final decision has not yet been made. “