Jim O’Neill, the British Treasury minister and former Goldman Sachs chief economist, could quit over new UK prime minister Theresa May’s approach to China exposed by her handling of plans for a new nuclear plant. Lord O’Neill was a star signing brought into the Treasury during George Osborne’s time as chancellor to build relations with China and oversee new infrastructure. He is best known outside the UK for having coined the phrase “Brics” in 2001 to describe the world’s leading emerging economies, Brazil, Russia, India and China. The real goal for Beijing in Britain is not so much Hinkley Point itself, but the opportunity to build and finance another nuclear power station of its own design at another of EDF’s sites in Bradwell, Essex. “This is all about Bradwell,” said one minister. “I’m sure Theresa would be happy to take £6bn off the Chinese for Hinkley but it’s not clear whether she is happy about the next stage.”
FT 31st July 2016 read more »
Daily Mail 1st August 2016 read more »
Politics Home 1st August 2016 read more »
Theresa May’s postponement in approving the Hinkley Point nuclear power station is a heavy blow to her predecessor’s attempts to cultivate China as a key investment and strategic partner. The UK and China had proclaimed a “golden era” of commercial and diplomatic relations, and President Xi Jinping in October referred to the investment in Hinkley Point as a “flagship project” of bilateral co-operation. Chinese officials have been clear that if Hinkley does not now go ahead, there would be little chance that the “golden era” would ever get off the ground. Failure of the deal would be damaging to Chinese ambitions that reach far beyond the project itself. If the deal is shelved, it may be felt by Mr Xi as a personal rebuff. Not only did he sign the deal on Hinkley with Mr Cameron, the other Chinese company that was due to take a stake in the project — China National Nuclear Corporation (CNNC) — is a constituent of the military-industrial complex that bolsters Mr Xi’s power base. The companies believe that helping to build a nuclear power plant in the UK is a springboard to the international market. A month after the Hinkley deal was announced, CNNC won a $15bn contract to build two reactors in Argentina, one of which uses China’s homegrown technology.
FT 31st July 2016 read more »
UK’s proposed Hinkley Point nuclear project is “significant” for China’s nuclear power industry because it is the first nuclear power project in the West that a Chinese company will participate, a Chinese energy expert said. Lin Boqiang, the director of the Center for Energy Economics Research at the Xiamen University told state-run newspaper Global Times: “It is not easy for China to participate in a nuclear power project in a Western country. Any concern or objection from any party could lead to reviews and delays.”
IB Times 1st Aug 2016 read more »
Dominic Lawson: t would be very embarrassing for her to declare, even though the Hinkley deal was the high point of the Sino-British co-operation agreed during the state visit of China’s President Xi Jinping last October, that she would be suspending it until she had made up her mind as the new Prime Minister. But that is precisely what she did: Mrs May seems to have been not in the least embarrassed. At the risk of generalising about the difference between the sexes, I believe this is more a characteristic of women — and not just women prime ministers. The absurdly-named weaker sex are much less easily embarrassed than us men. Perhaps this is partly what Kenneth Clarke meant, when he was (inadvertently) recorded during the short-lived Tory leadership campaign saying to his fellow ex-Cabinet colleague Malcolm Rifkind: ‘Theresa is a bloody difficult woman . . . but you and I worked with Margaret Thatcher.’
Daily Mail 1st Aug 2016 read more »
The Hinkley project is now eight years behind schedule. The chief executive of EDF Energy Vincent de Rivaz infamously said Brits would be cooking their turkeys using power from Hinkley by the Christmas of 2017. It is now not expected to be up and running until 2025 at the earliest. With an agreed strike price of £92.50/MWh, critics have questioned Hinkley’s value for money, particularly when the cost of renewable alternatives is falling fast. There are concerns over EDF’s ability to finance the project. At the end of 2015 the company had net debts of £37.4 billion and, at £18 billion, the cost of building Hinkley is almost equal to the value of the entire company (£19.2 billion).
Edie 29th July 2016 read more »
Plans to protect Hinkley Point from national security threats by giving the Government a “special share” in the nuclear project were blocked by George Osborne, a former Cabinet minister has claimed. Sir Edward Davey, who served as energy secretary in the Coalition, last year assured MPs worried about Chinese involvement in Hinkley that the Government would have “a special share in the consortium”, enabling it to intervene on certain decisions to protect national security. But Sir Edward last night revealed that the plan, which could have provided “extra safeguards”, was subsequently dropped after being “rejected without explanation” by the former Chancellor. Theresa May’s Government on Thursday announced a surprise review of French energy giant EDF’s proposed £18bn project in Somerset, postponing final approval until the autumn, amid security concerns about China’s proposed role.
Telegraph 31st July 2016 read more »
Guardian 1st August 2016 read more »
Bridgwater Mercury 1st August 2016 read more »
The projected cost of guaranteeing the amount paid for electricity from Hinkley C has risen considerably because the government forecast for the wholesale price of electricity has fallen. The estimated extra amount consumers will pay has risen for one simple reason – the government’s forecast for the wholesale energy price in the future has fallen. The lower the wholesale price, the bigger the chunk UK households have to pay to make sure EDF gets paid £92.50 per megawatt hour. The strike price of £92.50 is in 2012 pounds, so will be considerably higher by 2025. Already, if you adjusted for CPI inflation, the figure would be about £97. Another figure that is given in 2012 pounds is the government’s estimate that the cost of Hinkley C will add £10 per year to each household’s bill. In current pounds that’s about £10.50. So where does the £10 per household actually come from? The government has so far declined to explain how this differs from its own calculation. Last year, the government department responsible predicted that the project would add between £4bn and £19bn to household bills over the lifetime of the station. If you take a central figure of £11.5bn, divide it by the projected 35-year lifetime and divide by the number of households, then you do indeed get to about £10 per household. But the National Audit Office says that figure for project cost has risen to £29.7bn, and if you calculate that per household per year then you get to £25 per household per year.
BBC 29th July 2016 read more »
Countries legally objecting to a European Commission decision to facilitate the construction of new nuclear power plants in the UK are determined to pursue their case, despite the news of Hinkley Point C being approved by owners EDF to go ahead. Alexandra Perl, press spokesperson at the Austrian Federal Ministry of Science, Research and Economy told Power Engineering International, “The EDF-decision does not change our position. Besides that, there is no new development. Austria has filed a lawsuit at the European Court of Justice and is now waiting for the further development.” Olaf Munichsdorfer, top advisor to the Luxembourg ministry of environment, when asked by this website if his government would continue to oppose the facilitating of nuclear power, provided just a one word answer – “Yes”.
Power Engineering International 31st July 2016 read more »
Theresa May may have gained short term kudos for ‘stamping’ her authority on the Hinkley decision by delaying it until the Autumn. But in reality all she may have done in the long term is emphasised the fact that she sanctioned a decision that resulted in the biggest industrial disaster to have affected the country in modern times. Once the Government signs the project it will be committed to footing the bill for a long running engineering construction foul-up, whatever the terms of the Government’s contract may actually say. It should be obvious from the problem that EDF has had with its attempts to build the two reactors at Okiluoto in Finland and Flamanville in Normandy that there is a very high chance that the project will end in disaster, organised by a company whose leaders ignore commercial logics in pursuit of a discredited piece of technology – the hallmark of a nationalised industry that controls the state. But now EDF say they will go ahead, in 2019, with ‘pouring concrete’ (ie starting building proper) once Flamanville has ‘proved’ itself. Yet even this timetable may not happen, pushing EDF further into its financial crisis and producing even more handouts from the french state to EDF.
Dave Toke’s Blog 31st July 2016 read more »
You don’t have to be a Sinophobe, or indeed a Francophobe, to wonder whether the Hinkley Point nuclear power project is entirely in the British national interest. The new prime minister wants a fresh look at it, and that is entirely wise. This is a commitment that will still be operating when babies born now will be approaching their retirement. It makes assumptions that may look realistic in today’s world, but not tomorrow’s. China’s general outlook on the world is peaceful and friendly: but it is certainly jealous of its special position as an east Asian superpower, and the extravagant territorial claims it makes in the South China Sea are a direct challenge to her neighbours, and their ally, the United States. China also has an ambivalent relationship with the semi-sane regime in North Korea. As an international partner, China has few, if any, direct quarrels with Britain, even over Hong Kong, but its emergence as a military as well as industrial force means that we should be cautious about the extent of our co-operation. A half a century is a long way to look ahead, and Theresa May is right to want to assess thoroughly whether British security interests could be, one day, compromised by the Hinkley deal, and the other nuclear projects that have been suggested may follow it.
Independent 31st July 2016 read more »