Britain approves Hinkley Point nuclear deal

AFP, LONDON: Britain gave the go-ahead yesterday for the Hinkley Point power station, its first nuclear plant in a generation, but set conditions to address concerns about China’s role in a landmark European project.
China has a one-third stake in the project and analysts had warned that Britain, which needs to forge new trade deals after June’s vote to leave the EU, could have jeopardised relations with the world’s second-largest economy if it scrapped the deal.
The announcement, welcomed by French and Chinese backers, came two months after Prime Minister Theresa May caused shockwaves by ordering a review of the £18 billion (21 billion euro, $24 billion) deal brokered under her predecessor, David Cameron.
Jean-Bernard Levy, chief executive of the French state-owned power company EDF, said the move “relaunches nuclear power in Europe”.
EDF’s board had already approved its participation in the project in southwest England in July when May’s government suddenly announced it was pausing it.
“We have decided to proceed with the first new nuclear power station for a generation,” Britain’s Business Secretary Greg Clark said in a statement, while pledging fresh measures “to enhance security”.
One of Downing Street’s prime concerns was over the security implications of allowing China to take such a large stake in a critical infrastructure project.
But Clark’s ministry explained the government was now taking steps to ensure it could intervene to stop any sale of EDF’s stake.
“The agreement in principle with EDF means that the government will be able to prevent the sale of EDF’s controlling stake prior to the completion of construction,” it said.
“Existing legal powers, and the new legal framework, will mean that the government is able to intervene in the sale of EDF’s stake once Hinkley is operational.”
Olivia Gippner, a fellow in EU-China relations at the London School of Economics said the framework was aimed at China but “by introducing a general national security test rather than focusing only on Chinese investment, this is a very diplomatic solution”.
Good for jobs
Under the deal, Beijing’s state-run China General Nuclear Corporation (CGN) is set to finance £6.0 billion of the costs, with EDF providing the remainder.
EDF’s share price was down 0.71 per cent at 11.11 euros on the Paris stock exchange at 0935 GMT, recovering from a sharper drop immediately after the announcement.
French Prime Minister Manuel Valls hailed the deal as “excellent news” for France’s nuclear sector and domestic employment.
May called French President Francois Hollande on Wednesday evening to tell him that the British government had approved the project, the French presidency said.
CGN said in a statement on social network Weibo it was “delighted” at the move.
Critics have focused on the growing difference between an electricity price guarantee for EDF, subsidised by the British taxpayer, and current falling energy prices.
May’s joint chief of staff, Nick Timothy, also made his scepticism over the security aspects of China’s involvement in the project clear last year.
It was “baffling” that Britain had welcomed investment by state-owned Chinese companies given fears they could build weaknesses into IT systems, “which will allow them to shut down Britain’s energy production at will,” Timothy wrote in a blog.
Campaigners against Hinkley Point were due to hand in a 300,000-signature petition to May’s Downing Street office later on Thursday with environmental pressure group Greenpeace.
Steve Thomas, emeritus professor of energy policy at London’s Greenwich University, said there was still “a number of major hurdles to get through before Hinkley can go ahead” including financing at EDF’s end.
“If they aren’t (overcome), British loan guarantees will not be granted and the remaining credibility of the EPR (a new reactor design set to be used at Hinkley) will be gone,” he added.
Deal sealed on state visit
The Hinkley facility will not be operational until 2025 -- two years later than originally planned when the deal was first unveiled.
China’s one-third stake in the deal was sealed last year on a state visit to Britain by Chinese President Xi Jinping.

Britain approves Hinkley Point nuclear deal

AFP, LONDON: Britain gave the go-ahead yesterday for the Hinkley Point power station, its first nuclear plant in a generation, but set conditions to address concerns about Chinas role in a landmark European project. China has a one-third stake in the project and analysts had warned that Britain, which needs to forge new trade deals after Junes vote to leave the EU, could have jeopardised relations with the worlds second-largest economy if it scrapped the deal. The announcement, welcomed by French and Chinese backers, came two months after Prime Minister Theresa May caused shockwaves by ordering a review of the 18 billion (21 billion euro, $24 billion) deal brokered under her predecessor, David Cameron. Jean-Bernard Levy, chief executive of the French state-owned power company EDF, said the move relaunches nuclear power in Europe. EDFs board had already approved its participation in the project in southwest England in July when Mays government suddenly announced it was pausing it. We have decided to proceed with the first new nuclear power station for a generation, Britains Business Secretary Greg Clark said in a statement, while pledging fresh measures to enhance security. One of Downing Streets prime concerns was over the security implications of allowing China to take such a large stake in a critical infrastructure project. But Clarks ministry explained the government was now taking steps to ensure it could intervene to stop any sale of EDFs stake. The agreement in principle with EDF means that the government will be able to prevent the sale of EDFs controlling stake prior to the completion of construction, it said. Existing legal powers, and the new legal framework, will mean that the government is able to intervene in the sale of EDFs stake once Hinkley is operational. Olivia Gippner, a fellow in EU-China relations at the London School of Economics said the framework was aimed at China but by introducing a general national security test rather than focusing only on Chinese investment, this is a very diplomatic solution. Good for jobs Under the deal, Beijings state-run China General Nuclear Corporation (CGN) is set to finance 6.0 billion of the costs, with EDF providing the remainder. EDFs share price was down 0.71 per cent at 11.11 euros on the Paris stock exchange at 0935 GMT, recovering from a sharper drop immediately after the announcement. French Prime Minister Manuel Valls hailed the deal as excellent news for Frances nuclear sector and domestic employment. May called French President Francois Hollande on Wednesday evening to tell him that the British government had approved the project, the French presidency said. CGN said in a statement on social network Weibo it was delighted at the move. Critics have focused on the growing difference between an electricity price guarantee for EDF, subsidised by the British taxpayer, and current falling energy prices. Mays joint chief of staff, Nick Timothy, also made his scepticism over the security aspects of Chinas involvement in the project clear last year. It was baffling that Britain had welcomed investment by state-owned Chinese companies given fears they could build weaknesses into IT systems, which will allow them to shut down Britains energy production at will, Timothy wrote in a blog. Campaigners against Hinkley Point were due to hand in a 300,000-signature petition to Mays Downing Street office later on Thursday with environmental pressure group Greenpeace. Steve Thomas, emeritus professor of energy policy at Londons Greenwich University, said there was still a number of major hurdles to get through before Hinkley can go ahead including financing at EDFs end. If they arent (overcome), British loan guarantees will not be granted and the remaining credibility of the EPR (a new reactor design set to be used at Hinkley) will be gone, he added. Deal sealed on state visit The Hinkley facility will not be operational until 2025 -- two years later than originally planned when the deal was first unveiled. Chinas one-third stake in the deal was sealed last year on a state visit to Britain by Chinese President Xi Jinping.