Chinese seek greater say in UK nuclear plants
The state-owned Chinese nuclear group that is in talks to invest in Britain’s new nuclear programme wants greater operational control of any new plants it finances, potentially creating a national security headache for the government.
But CGN has made it clear to EDF that it will only proceed if it is given more of a say in running other plants the two companies build together in the UK, according to people familiar with the talks.
As well as Hinkley, EDF also has plans to construct two new reactors at Sizewell in Suffolk. One of the people said CGN could seek to become joint operator of the new Sizewell plant – although EDF is likely to retain overall control. The Chinese could also push for greater involvement in the plant’s construction, and might even seek to provide the design for its reactors. “CGN is using Hinkley as a stepping stone,” he said. “In the next project, they’ll want greater control.”
However, given the sensitivities surrounding nuclear power, the idea of allowing a Chinese state-backed company to take an operational role in a nuclear power station could raise a welter of national security concerns.
Similar unease arose last year when Chinese companies expressed an interest in bidding for Horizon, a nuclear project that has permits to build reactors in Anglesey and Gloucestershire. The UK government insisted the Chinese could only take a minority stake in Horizon, which was ultimately acquired byHitachi of Japan.
Similar misgivings have complicated deals involving other Chinese state-backed companies in the US and Europe, particularly in the energy and telecommunications sectors.
Mark Pritchard, a Conservative MP and member of the national security strategy committee, said Chinese companies should only be able to take a “minor” role in sensitive sectors of the economy such as energy.
Chinese investment in UK energy and infrastructure is growing. Last year, China’s main sovereign wealth fund bought a stake in Thames Water, while Sinopec bought a 49 per cent stake in Canada-listed Talisman’s UK North Sea business for $1.5bn. Meanwhile Cnooc’s $18bn acquisition of Nexen, another Canadian group, gave it stakes in giant North Sea oilfields such as Buzzard.
China is becoming a major force in nuclear power with 17 reactors in operation and 28 under construction. Its nuclear companies are also increasingly looking to expand abroad.