George Osborne said in Beijing on Sunday he believed Britain and China stood on the brink of 'a golden decade of co-operation'
George Osborne said in Beijing on Sunday he believed Britain and China stood on the brink of 'a golden decade of co-operation'

The UK has opened the way for the first Chinese-designed nuclear power plant in the west, saying Beijing could use Britain to launch a global rollout of its technology.

Amber Rudd, energy secretary, said she wanted Beijing to take the lead in developing new nuclear plants in Britain. She said China was expected to lead the construction of a Beijing-designed nuclear power plant in Essex, in eastern England, its first in the west, under a proposed joint deal with EDF, the French energy group, to build a new generation of UK reactors.

“They very much want to have their design up and running in the UK,” she told the Financial Times on a visit to Beijing. “That’s because we have such tough standards of regulation everyone can have confidence they are safe and show that they have a great operation to take elsewhere.”

Her comments came as chancellor George Osborne announced during the same visit an initial £2bn government guarantee for the Hinkley Point nuclear power station in south-west England in an attempt to boost the much delayed project, which has major Chinese backing.

Mr Osborne said the £24.5bn project, to be built by EDF to a French design in partnership with two Chinese companies, would “open the door to unprecedented co-operation” between the UK and China on more nuclear stations.

The UK government’s strong drive to build commercial ties with China, including in a sector as sensitive as nuclear power, has raised eyebrows among its western allies. Senior US officials complained privately this year about London’s “constant accommodation” of China after Mr Osborne signed up to become a founding member of its new Asian Infrastructure Investment Bank.

But Mr Osborne said he believed Britain and China stood on the brink of “a golden decade” of co-operation, adding: “No economy in the world is as open to Chinese investment as the UK.”

Ms Rudd said China would “definitely be part” of building Britain’s next generation of nuclear power stations, with five planned in the short term, but she also expected French and Japanese reactor designs to be in the mix.

The chancellor and Ms Rudd’s nuclear diplomacy was intended to pave the way for a final investment decision to be taken on Hinkley Point in time for a state visit to London by President Xi Jinping in October.

State-backed EDF is trying to finalise a deal with its Chinese partners on funding. Mr Osborne’s initial £2bn guarantee, which could rise if EDF meets certain conditions, is intended to bring the talks to a head.

The pact between Britain, France and China would see Beijing help pay for Hinkley and a second nuclear plant at Sizewell, in Suffolk, in return for taking a controlling stake in Bradwell, in Essex, which would be the first Chinese-built and operated reactor in the west.

Hinkley is one of only a handful of new reactors being built in Europe. It will supply 7 per cent of the UK’s electricity once online but a 2023 completion date has been dropped.

In a BBC interview, Ms Rudd said that while nuclear as a source of electricity was not “cheap”, it did offer “value for money”.

“It’s a lot of money compared to coal, but we want a source of low-carbon electricity,” she said. “This has to be part of the mix.”

The two sides are haggling over their final shares of construction spending and the role to be played by the two state-owned Chinese companies — China General Nuclear Corporation and China National Nuclear Corporation — in the building of up to three plants.

It is thought they are looking at an approximately 60:40 split of the investment in Hinkley, with EDF holding the controlling share, after possible minority investors, such as Saudi Electric, stayed out. Other partners could come in later but only after the project gets under way.

Additional reporting by Lucy Hornby and Conor Sullivan

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