China to build nuclear reactor in UK

The construction site of a nuclear power project of China National Nuclear Corp in Fuqing county, Fujian province. The company and China General Nuclear Power Group will support Hinkley Point C project in the United Kingdom. [Photo/Xinhua]

British Prime Minister David Cameron is set to sign a landmark deal next month to allow China to build a nuclear reactor in Essex in the southeast of England, local media reported. The plant would be the first Chinese-designed and operated facility in a Western developed countries.

As the British government aims to replace its aging fossil-fuel plants with low-carbon alternatives, the Chinese involvement is key to its nuclear plans.

The Chinese design is expected to be capable of producing 1 gigawatt of electricity－enough to satisfy the needs of 1 million British households.

It is very clear that nuclear projects require large up-front capital investment and take a long time to actually begin earning revenue from generating electricity, so a pure financial investor in a nuclear project may feel more uncertainty about future returns earned only through operational profit.

If an investor participates in a nuclear power plant's development, as well as the construction, operation, fuel cycle and decommissioning phases, then there is a chance to earn returns from the provision of a range of services as the project progresses.

In recent years, Chinese nuclear companies have been in discussion with various companies, research centers and organizations in the UK to invest and also localize its technology for the British market.

Talks started with the Hinkley Point C project, led by Electricite de France SA, a major electrical producer largely owned by the French government.

While this project was already in the advanced stages of planning, a major development occurred in 2013 when British energy firm Centrica decided to withdraw its 20 percent stake from the project due to escalating cost estimates and delays.

EDF Group and two Chinese nuclear companies, China General Nuclear Power Group and China National Nuclear Corp, reached an agreement in 2013. The two Chinese companies will support Hinkley Point C, and they would also be junior partners, and cover part of the costs, for a follow-on plant at Sizewell. EDF would lead the construction and operation of both sites.

In return, EDF will support the two Chinese companies in the development of a new atomic plant at Bradwell B, the site of a partially decommissioned nuclear power station in the UK. The French would become a minority partner and assist the Chinese through Britain's approval process for a new reactor design.