United Kingdom to allow Chinese companies to purchase stakes in latest $25.9b reactor project
The United Kingdom recently signed a $25.9 billion deal to build a new nuclear power plant at Hinkley Point in the southwestern part of England. The project is a landmark for several reasons. It's the UK's first nuclear power plant in 20 years — the country has nine aging ones — and flies in the face of a trend to retreat from nuclear power led by Germany and Japan following that country's Fukushima disaster in 2011 when an earthquake and tsunami caused meltdowns that are still festering.
The deal is also unique because of its structure: the UK is allowing Chinese companies to buy stakes in the project — China General Nuclear Corp and China National Nuclear Corp will put up a reported 30 percent to 40 percent of the cost, and the French government-owned Electricite de France SA will hold a 45 percent to 50 percent stake.
While Germany two years ago announced a goal of shutting down all of its nuclear power plants by 2022, the UK plans to put up 12 new reactors at five sites over the next 16 years.
China, which has 17 reactors, plans to build dozens of nuclear reactors and, following a slowdown after Fukushima, is picking up its pace again, which at one point was breaking ground on a new reactor every few months. Now with its foot in the door for the UK's energy future, China could play an even more significant role there.
In announcing the decision to allow Chinese investment in the power plant, UK Chancellor of the Exchequer George Osborne said the new relationship was "an important potential part of the government's plan for developing the next generation of nuclear power in Britain. It means the potential of more investment and jobs in Britain, and lower long-term energy costs for consumers".
The opening could lead to China taking a majority stake in the future and even a 100 percent ownership arrangement someday, the Daily Telegraph reported.
The deal is a further plus for China because as it continues to develop its own reactors, it has been relying on foreign technology.
US Energy Secretary Ernest Moniz visiting China recently said that as part of a bilateral cooperation agreement, China is likely to supply parts for US nuclear power plants that are under construction.
The four new US reactors — the first to be built since the 1979 Three Mile Island accident in Pennsylvania — are in Georgia and South Carolina and are under close scrutiny as harbingers of nuclear power's future in the US.
While there are no confirmed reports of what specific parts the Chinese will supply, the Financial Times cited Chinese nuclear power executives as saying that pressure vessels, steam generators and reactor coolant pipes were all possibilities, as the country was already supplying components to thermal plants around the world.
One of the side benefits of China's rapid expansion into nuclear energy technology in recent years is a supply chain that can look beyond domestic demand and supply international projects, allowing competitive economies of scale in sourcing components.
The downside of that rapid growth is that it has left China with a shortage of experienced operators. Moniz was in China for the groundbreaking ceremony at the new Center of Excellence on Nuclear Security, a joint effort to train Chinese technicians in industry standard operational safety measures and protocols.
The center, which is in the Changyang science and technology park outside of Beijing, will be fitted out with environmental labs, response force drill facilities, sites for testing physical protection, and buildings for experiments and research.
"Safety and security are a critical element if the nuclear sector is in fact to be robust in our countries and other countries," Moniz said at a news conference at the US embassy in Beijing.
Moniz's three-day visit to China was about more than just nuclear power, however. Meeting with Chinese Vice-Premier Zhang Gaoli and officials of the science and technology industry, Moniz discussed how the US and China could collaborate on renewable technology for green growth and water-based power generation such as tidal, wave and hydro-power systems. He also said that China and the US had "a strong interest" in developing cooperation on shale gas production.
"All these issues must come together to see China develop resources at a large scale and in a rapid fashion," Moniz said.
He stressed that the US was committed to helping China develop new nuclear reactors in both countries and encouraging joint bids for projects elsewhere, as in the Hinkley deal in England.
"Nuclear collaboration played an important role in our visit and deservedly so," Moniz told reporters.
