London has approved the construction of the most expensive nuclear power plant in history, at Hinkley Point. Because what is at stake are billion-pound investments with China.
The new nuclear energy plant at Hinkley Point will be built in the south-west of England (United Kingdom): the British government has approved it, accepting the controversial plan put forward by Électricité de France (Edf) and its Chinese partner, the China General Nuclear Power Corporation (Cgnpc). Two nuclear reactors will be built which, once operational, should provide 7 per cent of the United Kingdom's energy needs. Construction work will take 10 years if deadlines are met, and will cost £18 billion, approximately $24 billion.
A few months ago, the decision had been deferred by the British prime minister herself, Theresa May, who had decided to take the time needed to review the project approved by her predecessor, David Cameron. The former prime minister had championed it as one of the most effective ways to reduce CO2 emissions. The main concerns centred on the scale of the financing and on whether the involvement of a Chinese giant in a nuclear power plant on home soil did or did not pose a security risk.
The new plant's project envisages that the £18 billion (approximately €21 billion) required will be funded two-thirds by France's Edf and one-third by China's Cgnpc, which will also contribute the technology. Beyond construction costs, the bill for the public purse must also account for incentives: London will guarantee Edf the right to sell the energy produced by the plant at £92.5 (approximately €108) per megawatt-hour for the next 35 years, more than double current market prices. This has failed to convince many observers, who would have preferred to direct the same expenditure towards renewables and their development. Already a year ago, Bloomberg New Energy Finance had calculated that the United Kingdom could generate six times the electricity of the Hinkley Point nuclear reactor if only it had invested the same money in wind power.
The nuclear project is of strategic importance to China. Cgnpc intends to hold a minority stake in a similar nuclear reactor at Sizewell, as well as a majority stake in another at Bradwell, where Chinese technology will again be used. In a statement to the media, Cgnpc said it is able to "provide the nuclear capacity needed at Hinkley Point, Sizewell and Bradwell" and that it intends to play "an important role in meeting the United Kingdom's future energy needs." This increasingly strategic presence in the British energy market has raised some misgivings: certain individuals, such as Nick Timothy, May's chief of staff, interpret it as an opportunity handed to the Chinese state giant to "shut down Britain's energy production at any time", bringing the entire country to its knees.
But the British government has pressed ahead, maintaining that "new significant safeguards" have been built into the agreement to ensure that China or other foreign investors cannot hold stakes in British nuclear power plants without government approval.
Approval of the project gives further momentum to the United Kingdom's relations with France and China. While the British prime minister and French president François Hollande welcomed the agreement as a demonstration of excellent Franco-British cooperation in the industrial and energy fields, the final green light for the new English nuclear power plant speaks above all of the restored relations between Beijing and London.
A few months ago, prime minister May's decision to review the project had provoked widespread protests in Chinese state media and even an open letter from the Chinese ambassador to London, Liu Xiaoming, published in the Financial Times, in which he described the moment as "crucial" for relations between the two states and concluded by expressing his hope that "Britain would continue to keep its doors open to China." In effect, the approval of Hinkley Point confirms to Chinese president Xi Jinping the British government's willingness to respect Chinese interests in the country and preserves London's pivotal role in China's internationalisation strategy. In return, London will be able to count on the promised billion-pound investments.