U.K. Chancellor of the Exchequer George Osborne expressed that the government will encourage Chinese investors to be their financing partners in building a new nuclear power plant in southwest England.
According to Osborne, the U.K. government guarantees that it will spend 2 billion pounds ($3 billion) in building the Hinkley Point C nuclear power plant located in southwest England which is scheduled to start producing electricity by 2023. The government further agreed that plant operators will get a fixed above-market electricity price for the duration of 35 years as a way to assure them that their investment will break even.
"The chancellor's approval of the infrastructure guarantee is a clear sign of the government's commitment to Hinkley Point C," said Vincent de Rivaz, chief executive of EDF Energy, a French energy company. "The government's determination to bring about a renewal of infrastructure and to attract inward investment to the UK are demonstrated by this good news."
On his trip to China, Osborne added that the deal would somehow pave the way for EDF Energy to finalize an investment decision on the project which had been delayed due to the financial costs that the project will entail.
The project has been estimated to have a total building cost of £24.5 billion ($38 billion) which EDF claims it cannot afford on its own. The firm had so far been seeking for financial partners to invest in the project and had been giving stronger focus on China. Since the move to gain China's support has been rather difficult, the U.K. government decided to intervene by giving a guarantee that it will shoulder part of the cost.
The deal between the U.K., France and China stated that the latter will have to pay for Hinkley and another nuclear power plant to be built in Suffolk. In return, China will get a controlling stake in Bradwell which is a new plant to be built in Essex.
"We want the UK to be China's best partner in the West," said Osborne at a joint news conference with China's Vice-Premier Ma Kai while he was in Beijing. "[This guarantee] paves the way for Chinese investment in UK nuclear [to help provide] secure, reliable, low carbon electricity for decades to come."
Energy Secretary Amber Rudd echoes the same sentiments by saying that Beijing ought to take the lead when it comes to Britain's nuclear plant development and added that nuclear power played an important role in assuring the U.K.'s energy security.
"We want low-carbon electricity and if we're going to hit our ambitious [emissions reduction] targets then we have to have nuclear," said Rudd.