Among the issues that will occupy the delegates at the Conservative party conference in Manchester on Monday, energy will be at the top of the list.
Rising global gas prices, a lack of wind power and rising household bills have drawn attention to the UK’s energy needs – and the role of nuclear power in particular.
For the past decade, Britain’s ambitions to build more nuclear power plants have been intertwined with those of China. Hinkley Point C, the long-delayed and over-budgeted £ 23 billion power plant in Somerset that will be the first new power plant in a generation, is being funded with Chinese money.
China’s nuclear ambitions – at least as far as Britain is concerned – could collide with a new political reality. Opponents of China’s involvement in British infrastructure turn wheels as the government reports the People’s Republic is to be ousted by Sizewell C – a £ 20 billion sister of Sizewell B on the Suffolk coast that is set to supply 6 million households with electricity.
Beijing’s international nuclear ambitions have suffered a “body blow,” according to Iain Duncan Smith. The Inter-Parliamentary Alliance of the former head of the Conservative Party on China has successfully campaigned for the telecommunications giant Huawei to be kicked out of the British 5G network under pressure from the administration of Donald Trump.
“The UK government has learned the hard way that we have to face them,” he said.
Tom Tugendhat, Chairman of the Sinosceptic China Research Group, praised the “more realistic approach”. “Chinese state-owned companies shouldn’t build nuclear power plants in the UK,” he said. “As the China Research Group has shown, Beijing’s attempts to interfere in other countries are increasing, and Britain shouldn’t make itself vulnerable.”
The duo responded to suggestions, first reported in the Guardian, that officials were investigating methods used by China General Nuclear (CGN), which has a 20% interest in the Sizewell-C project to be built by France’s EDF The contract can be removed The equation. An announcement could be made as early as this month, using taxpayers’ money instead.
After Sizewell, CGN was to increase its involvement in the UK nuclear sector by acquiring a majority stake in Bradwell B in Essex, which would be a showcase for the China-designed Hualong One (HPR1000) reactor.
If China is forced out of a financial minority position in a plant built by the French government-sponsored EDF, the prospect of a China-controlled facility just 40 miles from London is certainly not a cause.
Bradwell would have been a great coup that would have shown the world that a large economy like Britain was open to Beijing’s proprietary nuclear technology.
Duncan Smith believes the UK’s decision could undo the plan. “If we do this, other countries will follow suit, and it will turn out to be a very big decision to point out the direction of travel to China. It’s a big strategic decision. “
He’s got the price on his side too. Generating one kilowatt hour of nuclear power costs about twice as much as offshore wind and solar power.
But did the anti-China hawks start celebrating too early? An industry source who has been watching China’s nuclear ambitions for years sees no reason to believe that CGN will bow to the pull-out pressure. China’s exit would spark a diplomatic dispute. “There was an ongoing effort […] to make the atmosphere so hostile that the company just gives up and walks away, ”the source said. “That seems like a really heroic assumption.”
CGN is heavily involved in the 3.2 GW Hinkley project, which could exceed its current budget of £ 23 billion and its completion date in 2027.
“Of course it is [continued Chinese investment in Hinkley] could be at risk, ”the source said. “CGN is making a big contribution [to the plant] but it is not the big flagship “Welcome to the world” that building an HPR1000 would be. “
The pressure on the British government from its own MPs, but also from abroad, seems to be behind the decision to keep China at a distance.
Resistance from the likes of Duncan Smith and Tugendhat is one thing, but American intervention is quite another.
Former US Secretary of State Mike Pompeo last year urged Britain to look across the Atlantic to its nuclear future and said the US is “ready to help our friends in the UK with any needs” they have.
The Trump administration has been vocal against Chinese tech breaches in the West, and the Biden administration is no different. But abandoning China to please America poses a problem for Britain.
The UK nuclear fleet has a capacity of 8.9 GW, about one sixth of the peak demand in winter and 20% of our average annual demand.
More than 7 GW of this capacity – seven of the eight existing power plants – are to be shut down by 2030.
Hinkley is the only project with a completion date in sight, with one reactor ramping up in 2026 and the next ramping up in 2027, but it’s an optimistic assumption that there won’t be any delays. Even if Hinkley goes as planned, UK nuclear capacity will drop to 4.4 GW by 2030 if nothing else is done.
Projected UK nuclear capacity with vs. without Hinkley Point C
The upcoming Cop26 climate change conference in Glasgow reminded everyone of the UK’s commitment to fully decarbonise the economy by 2050, while the gas price crisis has underscored the risks of being solely dependent on fossil fuels and renewable energies. Large nuclear power plants and their rotating turbines provide the vital inertia required to balance the grid and keep its frequency stable.
Economy Minister Kwasi Kwarteng stresses that nuclear energy is part of the solution, but something has to be done to accelerate these multi-billion dollar projects.
At Sizewell, the government’s great hope is regulated asset-base financing (RAB), an investment structure that offers potential investors secure returns but requires government regulations.
A government spokesman described it as a “credible model,” suggesting steps are being taken to fund Sizewell – not to mention projects like Wylfa on Anglesey, which Japan’s Hitachi recently abandoned over funding concerns. The new financing model, which is used in water and electricity networks, could attract American investors like the construction giant Bechtel.
If Beijing and London can find a diplomatic solution to remove CGN from the UK nuclear industry, this funding model is one solution that could attract financiers to replace the Chinese. If nuclear energy has an important role to play in the UK’s decarbonised future, time is of the essence.
Nuclear options
Artistic impression by CGN of what a new nuclear power plant in Bradwell, Essex might look like. Photo: CGN / PA
The UK has struggled to get nuclear projects off the ground for the past decade, but it has options.
The first is to find investors for large new build projects. With Sizewell C investors pending, China’s stake is in doubt after signals have been signaled that ministers are preparing to buy out its stake in Bradwell B in Essex.
Offering more attractive funding options could be key to launching the £ 20 billion Wylfa project on Anglesey after Hitachi left last year. But the UK National Infrastructure Commission is cool on major new nuclear projects.
A potential leap in technology is considered to be advanced modular reactors (AMR) that use new coolants instead of water. Earlier this year, the government issued a call for evidence for the establishment of a program to demonstrate its feasibility. But even this pilot phase will not be finished until the 2030s.
There’s a lot of excitement about Rolls-Royce’s plans for small modular reactors (SMRs), called mini-nukes, which in theory could be introduced quickly and easily to increase capacity. The British engineering giant believes it will be online by 2030.
Then there is the tempting prospect of cracking nuclear fusion and harnessing the power of the stars to create theoretically limitless energy.
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