China syndromeU.K. Nuclear Power: The Next Huawei?

By Jo Harper

Published 25 August 2020

London’s relations with China — hailed as entering a “golden era” only four years ago — have deteriorated badly over the coronavirus crisis and the Hong Kong issue, hitting a nadir when the U.K. finally bowed to U.S. pressure to ditch Huawei’s involvement in its new-generation internet (5G) rollout. China warned the U.K. it would face “consequences if it chooses to be a hostile partner” after London announced its Huawei’s decision. Nuclear power, once a key part of the U.K. energy plans, faces rising costs, cheaper renewables, and domestic opposition – but it also finds itself at the center of a row between London and Beijing that could prove fatal.

London’s relations with China — hailed as entering a “golden era” only four years ago — have deteriorated badly over Hong Kong, hitting a nadir when the U.K. finally bowed to U.S. pressure to ditch Huawei’s involvement in its new-generation internet (5G) rollout.

In late 2019, the US published a list of companies linked to the Chinese military, and after Huawei came the China General Nuclear Power Group (CGN). The state-owned Chinese firm has invested 3.8 billion pounds (€4.1 billion, $4.3 billion) in Britain to date, mainly in the Hinkley Point nuclear plant under construction in Somerset, southwest England, and the Sizewell plant in eastern England. It is also seeking UK regulatory approval to build its own nuclear reactor at Bradwell in Essex, east of London.

China warned the U.K. it would face “consequences if it chooses to be a hostile partner” after London announced its Huawei’s decision. Liu Xiaoming, the Chinese ambassador to the U.K., reportedly said China could cut its backing for U.K. nuclear plants altogether.

Years of Chinese Involvement in U.K. Nuclear Industry
CGN’s involvement in the U.K. nuclear industry began in 2016 when a deal was signed with French state-owned utility Electricite de France (EdF) to collaborate on three reactors totaling 8.7 gigawatts (GW) of power generation, starting with Hinkley Point. The agreement spoke of CGN’s “progressive entry” into the UK’s “resurgent” nuclear ambitions.

The UK currently has 15 operational nuclear reactors at seven locations. At its height in 1997, 26 percent of the country’s power was generated from nuclear, but this has slipped since to 19 percent.

In the Sizewell and Hinkley projects, CGN is providing cash, holding 66 percent stakes, but with Bradwell it wants to build the reactor itself, using its own technology, and it wants to operate it. Observers say Bradwell is the prize CGN is really seeking: the first Chinese-built nuclear plant outside China.

In May, EdF outlined its plans to start work on Sizewell by the end of next year. The project would create 25,000 jobs, it said.

But EdF’s continued involvement could be thrown into doubt if no other investor came forward to replace CGN. This is especially troubling given the project is also expected to result in cost overrun. Hinkley Point now costs about 3 billion pounds more than the 20 billion pounds originally planned. Sizewell is also slated to cost 20 billion pounds.