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Ministers strike deal that could launch China into a plan to build a £ 20bn nuclear power plant on the Suffolk coast and inject tens of millions of pounds of taxpayer money instead – a move which would aggravate geopolitical tensions.
The government could announce its intention to take a stake in the Sizewell C plant, alongside the French electricity giant EDF, as early as next month, before the Cop26 climate summit.
This would likely result in the withdrawal of China General Nuclear (CGN), which currently owns a 20% stake in Sizewell, from the project.
This risks exacerbating political tensions, which are on the rise after Britain’s decision to join the Aukus nuclear submarine pact with America and Australia – a move designed to thwart the China’s military expansion. Communist state-backed electricity giant CGN is also funding EDF’s Hinkley Point C power plant in Somerset.
Sizewell, which is still in planning and development, would ultimately power 6 million homes, but has been plagued by opposition from local activists, fears over its price, and Chinese involvement.
Washington has leaned heavily on Westminster to pull China out of Britain’s nuclear power plans, blacklisting CGN, citing national security fears and accusing it of stealing military technology – says he denies. Former US Secretary of State Mike Pompeo last year urged Britain to take sides in the battle to develop nuclear technology, saying it “is ready to help our British friends with whatever they need. “.
Under Sizewell’s plans discussed by Whitehall and EDF officials, the government could take a stake in a development company that will push it through various stages of planning and bureaucracy, sharing the costs with EDF.
Private sector investors such as insurance funds L&G and Aviva would then be enticed at a later stage in exchange for a government-backed funding model called the Regulated Asset Base (RAB), diluting the taxpayer and EDF. . Legislation on funding the RAB – the same model used to fund airports such as Heathrow and water companies – is expected to be submitted to parliament next month.
EDF’s board is due to meet in November to discuss Sizewell’s push, but is wary of injecting tens of millions of dollars into the project without a firm commitment from Westminster.
EDF has lobbied extensively for an RAB mechanism, arguing that it could reduce the strike price – Sizewell’s guaranteed price for electricity – to between £ 30 and £ 60 per megawatt hour. Hinkley’s £ 92.50 strike price has been criticized as excessive at a time when offshore wind costs are falling.
All but one of the eight existing UK nuclear power plants, which provide up to 20% of its electricity, are set to close by the end of the decade, leading to a huge gap in low-carbon electricity production .
The global gas crisis and soaring energy bills have stepped up pressure on ministers to act, and ministers are keen to announce a deal on Sizewell next month, ahead of the November Cop26 climate summit in Glasgow. Business Secretary Kwasi Kwarteng is reportedly pushing the Treasury for a large share of nuclear power spending during the October 27 spending review.
China’s kickoff at Sizewell would effectively break the 2015 government’s agreement with CGN, under which it agreed to fund Hinkley and Sizewell, and then install its own reactors at a third site at Bradwell in the United States. Essex. The chances of CGN getting approval to build its reactor in Britain are considered slim. This agreement was seen as the culmination of what is known as the “golden age” between Britain and China.
Pressures to withdraw from China have intensified under Joe Biden’s administration, with executives of US construction giant Bechtel teaming up with Westinghouse, the US nuclear technology company owned by Canada’s Brookfield, to develop another nuclear power plant , in Wylfa on Anglesey.
In their presentation to the government, they said the project would strengthen the “special relationship”. “Through a successful partnership at Wylfa, the UK and US will share a common interest in promoting the use of this safe and reliable technology in new markets to compete with Russian and Chinese state-backed options.” , they wrote.
Stephen Thomas, professor of energy policy at the University of Greenwich, said: “CGN’s motivation in supporting the Hinkley Point and Sizewell projects was to ensure a chance to build its own reactor design at Bradwell. Now that Bradwell is off the table, they are unlikely to be interested in Sizewell’s investment.
“CGN may persist in approving its reactor design with UK authorities to achieve this benchmark accreditation, but this is where its UK nuclear ambitions should end,” he said.
CGN and EDF declined to comment.
The business department said, “Nuclear power has a key role to play as we strive to reduce our dependence on fossil fuels and our exposure to volatile global gas prices.
“CGN is currently a shareholder of Sizewell C until the government’s final investment decision. Negotiations are ongoing and no final decision has been taken.
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