The proposed new nuclear power station at Hinkley Point in Somerset has turned into the first headache for Theresa May’s government. The issue is now about far more than Britain’s energy policy. It is about foreign policy too. May is yet to say anything publicly about the government’s decision to review the £18bn project. The only official comment was from Greg Clark, the new business, energy and industrial strategy secretary, who welcomed EDF’s approval of the project but added: “The government will now consider carefully all the component parts of this project and make its decision in the early autumn.”Security, of course, should be a concern. But when Britain agreed to sell British Energy to EDF for £12.5bn in 2008, it became inevitable that foreign investment and expertise would be needed to build new nuclear power stations. The only way, therefore, to develop a home-grown energy policy is to move away from large Hinkley-type projects, either towards forms of renewable energy or towards smaller nuclear power plants, which Rolls-Royce can build. But if the government does decide to scrap Hinkley Point C, the decision should not be about security: it should be because alternatives offer more value, efficiency, and safety. The potential cost to the taxpayer through subsidies to EDF and China, and the question marks about the EPR reactor – there still isn’t one in service anywhere in the world – are more pressing concerns than Chinese involvement. If the government does scrap Hinkley Point C, it must outline the alternative route it intends to take – and then ensure there are no hard feelings in Beijing.
Observer 14th Aug 2016 read more »
China’s senior diplomat in Britain, Liu Xiaoming, has a reputation for undiplomatic remarks. The ambassador’s infamous likening of Japanese prime minister Shinzo Abe’s government to Lord Voldemort, Harry Potter’s threatening nemesis, did little to ease historical bilateral tensions between the two countries. His blunt remarks last week about the delay to the Hinkley Point nuclear power station project ordered by Theresa May also jarred badly. Liu put the government on notice that cancellation of the troubled £18bn scheme, in which the state-owned company, China General Nuclear Power (CGN), has (or would have) a 33% stake, could have serious, negative consequences for wider trade, investment and political relations between Britain and China. His warnings about damaged “mutual trust” and a “critical juncture” sounded less like the counsel of a friend, more like the threats of a bully. May will feel obliged to give serious weight to China’s concerns over Hinkley when a final decision is made next month. The Hinkley decision has suddenly been rendered more fraught by US allegations of industrial espionage involving CGN and by Australia’s refusal, on grounds of security, to allow Chinese control of a key energy asset.
Observer 14th Aug 2016 read more »
The fate of the new Hinkley Point nuclear plant could hinge on a little-known get-out clause that allows Theresa May to pull vital financial support if a similar plant in France is not running by 2020. The new prime minister shocked Hinkley’s developers — France’s energy monopoly EDF and the Chinese state giant CGN — when she decided to postpone approval of the £18bn project just hours before it was expected to get the go-ahead last month. EDF has been developing plans for Hinkley — the first atomic station in Britain for a generation — for nearly a decade. But soaring cost projections and delays have raised doubts about the Somerset plant, while there are concerns over giving a Chinese state entity a hand in key British infrastructure. However, problems at a sister plant at Flamanville in northern France could give May added political and legal cover to scrap the deal. Two years ago the EU approved a generous subsidy scheme that the government had agreed with EDF and CGN to underwrite the project. A key part of the deal was a Treasury guarantee for up to £17bn in loans.
Times 14th Aug 2016 read more »
Thank goodness that Theresa May has put on hold the Hinkley Point nuclear project. This joint venture between China and France was the trophy takeaway from a bold new age of Sino-British ties proclaimed last year. I do not know whether it is a good idea or not to build the plant. But the pause is a chance to make it a test of our national interests. It is baffling that so many people still think this is all about trade, energy or even principles. It isn’t. The Chinese ambassador, Liu Xiaoming, has warned us that Beijing is irritated by the delay. That is a clue to the real motive for China’s weird courtship of George Osborne, who championed investment by the People’s Republic. For him it was business. For China it was politics. Britain is important to Chinese leaders only because of our links with the United States. Their ambition is to push the Americans back across the Pacific. The politburo does not care about a few billions or a couple of nuclear power stations that may never be built on a faraway island. It does not mind if the renminbi is traded in London. Intelligence about British nuclear systems is not a priority, just a bonus. Human rights are irrelevant. China’s sole aim — the mandate handed to its eminently successful ambassador in London — was to divide Britain from the US by creating such economic dependence that in a moment of crisis the British government might falter in its resolve and let the Americans down. It is an ancient strategy: weaken your foe by stealth.
Times 14th Aug 2016 read more »