Britain signed a deal with France's EDF to build a 16-billion pound ($26-billion) nuclear plant, becoming the first European country to provide state guarantees to help fund a nuclear project. The Hinkley Point C project in south-west England, the first new European nuclear plant since the Fukushima crisis, is expected to start producing power from 2023 and will receive a guaranteed electricity "strike" price of 92.50 pounds ($150) per megawatt-hour for 35 years, more than twice the current market rate, EDF and the British government said on Monday.
The deal demonstrates that nuclear power plant developers require government backing for new projects in Europe, where costs for new atomic energy have surged after regulators imposed stricter safety rules following the 2011 Fukushima disaster. An EDF-led consortium will build two Areva-designed 1,650 megawatt European Pressurised Water Reactors (EPRs) that will produce about seven percent of British electricity, EDF said.
EDF's long-time Chinese partners, China General Nuclear Corporation (CGN) and China National Nuclear Corporation (CNNC), will take a combined stake of 30 to 40 percent in the consortium, while French state-owned nuclear group Areva will take 10 percent.
Discussions are also taking place with a shortlist of other interested parties, which could take up to 15 percent. China's CGN is building two EPRs in Taishan, China, and the Chinese companies hope that their involvement in the British project will give them the credibility to eventually sell Chinese-designed reactors in Europe.
British finance minister George Osborne said during a visit to China last week that Chinese nuclear firms could hold majority stakes in British plants in future. "Today we have a deal for the first nuclear power station in a generation to be built in Britain," British Prime Minister David Cameron said in a statement.
EDF said the guaranteed electricity strike price for Hinkley Point could fall to 89.50 pounds if a second nuclear plant at Sizewell, in east England, is built. The strike price range is roughly double the level of current British wholesale electricity prices, underlining the government's expectation of an increase in prices. The government said the construction of new nuclear plants will reduce household energy bills by more than 75 pounds per year in 2030 compared with a scenario where no new nuclear reactors were added.