PARIS: Plans to build two next-generation nuclear reactors at Hinkley Point in southwest England are stalled at the crossroads of ambitions by Britain, China and French electricity giant EDF.
A consortium led by EDF (Electricite de France) is expected to make a final decision this year on whether to invest in the gigantic project, estimated to cost £25 billion ($38.6 billion, 34 billion euros), which would be the first new nuclear power station in Britain in decades.
The decision could hinge on China’s role in the consortium through its state-run firms China General Nuclear Corporation (CGN) and China National Nuclear Corporation.
London is looking to the visit this week of Chinese President Xi Jinping as an opportunity to finalize the deal for Hinkley Point, two years after it first gave the green light for the project.
Hinkley Point would feature the European Pressurised Reactor (EPR), a third-generation reactor design considered the most advanced and safest in the world.
Britain last month pledged £2 billion for the nuclear plant, which it sees as necessary to meet the country’s energy needs as older coal and nuclear plants are retired, and also as oil reserves decline in the North Sea.
The Chinese companies are expected to largely finance and get a stake of around 40 percent in the nuclear plant that authorities hope will generate seven percent of Britain’s electricity.
“Britain is also hoping to revive its faded industrial sector and create high-paying jobs,” said Christophe Bonnery, head of an association of energy economists.
Aiming for 25,000 new jobs, the British government hopes that the agreement on Hinkley Point will be the first of many, he added.
In all, around 10 reactors are envisioned to be built in Britain, all by foreign companies.
“The idea is to get the Chinese with this first reactor in the frame of mind to co-finance the others that follow,” said Arnaud Leroi, of consultants Bain & Company.
China’s booming nuclear industry wants to take advantage of the favorable attitude in Britain toward nuclear energy to establish credibility for its technology and assure it access to the international market, analysts say.
“Beijing is looking for alliances and investments in Europe to acquire an expertise” to help develop its key national industries, said analyst Christine Lambert-Goue, Asia director at Invest Securities.
“If the cost of the EPR (reactor) drops, the Chinese will have a foothold in a technology of the future,” added Francois Pouzeratte of Eurogroup Consulting.
Like London, EDF is counting on the Chinese to agree to the investment as the French company does not have the means to back a huge project like Hinkley Point on its own.
“My hope is that our Chinese partners can take the right decision and will seize the day. The ball is in their court,” Vincent de Rivaz, who heads up the UK division of EDF, told the Financial Times this month.
Hinkley Point would not be the first time EDF has worked with the Chinese. It already has a long-standing partnership with CGN in building two EPR reactors at Taishan, and the French group hopes to open wider the doors to the huge Chinese market.
“Nuclear energy is an option that cannot be overlooked. The country (China) has 50 reactors of which 25 are under construction, representing the majority of nuclear plants being built in the world,” said Herve Machenaud, an EDF representative in China.
EDF also needs its ties with Chinese firms to maintain its know-how, an advantage that surpasses the risk involved in the transfer of technologies, experts say.
But clouds hang over the prospects for Hinkley Point.
EDF has had to push back four times the launch of its EPR reactor project at Flamanville in northwest France, now set for late 2018, causing increased cost overruns.
On the legal front, the Austrian government has filed a complaint with the European Court of Justice against state subsidies for the planned nuclear plant in Britain, on the grounds they distort the market. AFP