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Osborne gives go ahead for Chinese investment in British nuclear power

george osborne chancellorChancellor George Osborne has given the green light for Chinese companies to buy stakes in British nuclear power plants, it has been announced.

Furthermore, in the future, Chinese companies could even hold majority stakes in these power stations. This is according to Osborne, who made the revelations in a speech on the last day of a trade visit to China.

The first deal of this kind could be struck as early as next week as the new £14 billion plant at the Hinkley C site has been given the go ahead.

Blackouts ‘a very real possibility’ experts warn

This comes after further warnings that blackouts could hit Britain over the new few years.

A report from the Royal Academy of Engineering found that the system will be stretched “close to its limits” due to the closure of older power plants, as well as the slow progress in building new ones.

The winter of 2014-15 is expected to see supply be put under a lot of pressure, meaning that blackouts could be a very real possibility next winter.

European Union pollution directives mean that most coal-fired plants must be closed in 2015. This, coupled with the fact that many gas-fired stations are currently out of use due to the soaring cost of the fossil fuel, spells bad news for Britain’s energy supply.

In order to open up the gas-fired plants again, significant amounts of time and money would have to be put into the project.

The Hinkley C project

The Somerset-based Hinkley C project will be the first nuclear power station to open since 1995. The project is being led by EDF, which has been looking for others to join it to share the cost.

So far, the French state-controlled energy company has been negotiating with three Chinese nuclear giants on the project: CGN, CNNC and SNPTC. Osborne met with representatives from all three of these companies during his visit to China.

According to BBC Business Editor Robert Peston, one or two of these companies are likely to end up owning around 30% of Hinkley C.

A spokesperson from the Department of Energy and Climate Change (DECC) said that talks are currently taking place.

“Negotiations remain ongoing between the government and EDF on the potential terms of an investment contract for Hinkley Point C. No agreement has as yet been reached,” they commented.

“A contract will only be offered if it is value for money, fair and affordable, in line with government policy on no public subsidy for new nuclear and consistent with state-aid rules.”

‘The next big step’ for Britain and China

In a speech he made while visiting the Taishan nuclear plant in southern China, the chancellor said: “Today is another demonstration of the next big step in the relationship between Britain and China, the world’s oldest civil nuclear power and the world’s fastest growing civil nuclear power.”

This power plant is itself a collaboration between EDF and the CCNPG.

In exchange for allowing Chinese investors to buy stakes in British nuclear plants, there are also expected to be roles for UK companies in China’s nuclear programme. The superpower currently operates 17 nuclear reactors, providing about 1% of its electricity production capacity.