FT – China could quit UK nuclear projects if role threatened, experts warn

26 July 2021

China could quit UK nuclear projects if role threatened, experts warn Effort to remove state-owned CGN from Sizewell C said to leave Hinkley Point and Bradwell exposed Pouring concrete at Hinkley Point C. China General Nuclear is a minority investor in the power station being built by France’s EDF © EDF/Latitude Photography Share on twitter (opens new window) Share on facebook (opens new window) Share on linkedin (opens new window) Share Save Jim Pickard and Nathalie Thomas JULY 26 2021 78 Print this page China General Nuclear is likely to walk away from the Hinkley Point C power station being built in Somerset if the Chinese state-owned nuclear company is forced out of future projects in the UK, industry experts warned on Monday. The Financial Times revealed that the British government was exploring ways to remove CGN from the consortium planning to build the new £20bn Sizewell C nuclear power station in Suffolk. Ministers are also going cold on plans by CGN to build a plant at Bradwell-on-Sea in Essex using its own reactor technology. The company is already a minority investor in the 3.2 gigawatt Hinkley Point nuclear power station, which France’s EDF is building. One nuclear industry executive warned that CGN could reassess its involvement with Hinkley Point. They pointed out there were four interlinked agreements between CGN, EDF and the government dating to 2015: Hinkley Point, Sizewell, Bradwell and the pursuit of regulatory approval for China’s reactor design. “Neither EDF nor the government can assume they can just deal with Sizewell in isolation,” the executive said. “If you open one agreement then you potentially open all four. Legally, you open one part of the agreement, you run the risk of opening all parts of the agreement.”  Steve Thomas, emeritus professor of energy policy at University of Greenwich, said CGN’s investment in Hinkley was designed to make a profit and help secure its plant at Bradwell. With both of those objectives in jeopardy, the company could quit the UK, he warned. Twice weekly newsletter Energy is the world’s indispensable business and Energy Source is its newsletter. Every Tuesday and Thursday, direct to your inbox, Energy Source brings you essential news, forward-thinking analysis and insider intelligence. Sign up here. The Chinese company is eager to get UK regulatory approval at Bradwell for its own Hualong One HPR1000 reactor in order to help market it in other countries. The reactor design is going through the UK’s rigorous approval process, with a decision expected in the second quarter of next year. But Thomas pointed out that with Hinkley’s budget having jumped from £14bn to as much as £22.5bn, it was no longer clear whether the consortium would make a profit. “I would have thought that would put it into lossmaking territory,” he said. “They may well be very happy for an excuse to get out of it,” Thomas added. “If Bradwell is off the agenda and Hinkley Point won’t make money, why stick around?” CGN declined to comment. Ministers would prefer a situation where CGN was replaced as a minority investor in Sizewell. The change in mood at the top of government reflects the rapid cooling of relations between London and Beijing — in contrast with attempts by former prime minister David Cameron to court investment from China. Recommended The FT ViewThe editorial board Safeguarding Britain’s nuclear power future Tim Yeo, a former Tory energy minister who chairs the New Nuclear Watch Institute, an industry-supported think-tank, said concerns about Chinese involvement in the UK nuclear power sector had been overstated. Any disruption or interference in its operations would close down all export opportunities elsewhere for CGN, he argued. “The notion that China would arbitrarily close down a plant which they had built in UK for some geopolitical reason is absurd,” he said. “They have nothing to gain and everything to lose by disrupting the supply of electricity from a nuclear plant which they had built here.” Alison Downes, of Stop Sizewell C, a pressure group, said the government’s position threw EDF’s funding problems for the plant into sharper relief: “The simple fact is that Sizewell C won’t go ahead without new investors.”