Osborne smooths path for Chinese nuclear investment

China is due to strike a deal with EDF Energy to construct a nuclear power station, after chancellor George Osborne announced on Thursday he would clear the way.

China General Nuclear Power Corporation will sign a letter of intent to partner with EDF Energy on the construction of Hinkley Point C, its proposed £14 billion power station in Somerset.

On the last day of a trade visit to China in which he visited three nuclear companies, Osborne said Chinese firms will be allowed to invest in British nuclear plants. He made the announcement from Taishan power station, a joint venture between CGNPC and the French-owned EDF.

CGNPC is expected to take a minority stake in Hinkley Point C, but Osborne said Chinese companies could become majority stakeholders in future plants.

Osborne said: “Today is another demonstration of the next big step in the relationship between Britain and China – the world’s oldest civil nuclear power and the world’s fastest growing civil nuclear power. It is an important potential part of the government’s plan for developing the next generation of nuclear power in Britain. It means the potential of more investment and jobs in Britain, and lower long-term energy costs for consumers.”

Earlier in the week, Osborne witnessed a memorandum of understanding on civil nuclear cooperation between the two governments. The MoU lays the foundation for collaboration on investment, technology, construction and expertise. It also secures a place for British companies including Rolls Royce, International Nuclear Services and engineering firms in China’s multi-billion nuclear programme.

Energy secretary Ed Davey said: “This is an exciting development, strengthening our relationship with China in a way that will benefit both countries. Investment from Chinese companies in the UK electricity market is welcome, providing they can meet our stringent regulatory and safety requirements.”

Government has been locked in negotiations with EDF Energy over the “strike price” they will be guaranteed for their power and related support for Hinkley Point C. An announcement on the details agreed is expected on Monday.