LONDON (Reuters) - A planned nuclear plant to the east of London will not require state investment, the Chinese company building it said after the British government was criticized for helping another project.
“It is not our plan to seek direct investment from the UK government for Bradwell B,” Robert Davies, chief operating officer of CGN UK, a UK subsidiary of China’s General Nuclear Power Corporation (CGN), (IPO-CGNP.HK) told Reuters.
After saying it did not want to directly invest in new nuclear plants, Britain’s government made a U-turn this week, saying it could take a stake in Hitachi’s (6501.T) near $20 billion Wlyfa project in Wales,
CGN’s Davies said it was too early to discuss funding in detail but, but the fact that the Chinese-owned firm said it will not need such direct investment shows it is confident of funding the project itself, or being able to raise the cash.
The British government also faced protests over its decision to offer a guaranteed power price to the Hinkley Point project being built by France’s EDF (EDF.PA), Britain’s first new nuclear plant in more than twenty years.
Britain says it needs a new fleet of nuclear plants to replace aging coal and nuclear reactors set to close in the 2020s as well as to cut the country’s carbon emissions.
But large new nuclear power plants costing several billion pounds have struggled to secure financing, with the cost of lending higher than traditional infrastructure projects due to concerns over future potential liabilities.
This raised the possibility that it would also need to provide similar assistance for other new plants to be built.
Hinkley got the final go-ahead from EDF’s board in 2016 after several years of delay, and only after securing backing from the French government.
When announcing the possible Hitachi deal, Britain’s business minister Greg Clark said it hoped future nuclear projects “should be financed by the private sector.”
Hinkley was also awarded a subsidy minimum price guarantee from the British government of almost double current electricity prices, which the National Audit office said could cost consumers 30 billion pounds ($40 billion).
Davies said CGN’s Bradwell project would expect a much lower minimum guarantee price.
“We know we have to get within a realistic range of (the cost of) offshore wind,” he said.
Some offshore wind projects were awarded a minimum price as low as 57.50 per megawatt hour (MWh) in the latest round of subsidies, compared with the 92.50 pounds per MWh guaranteed for Hinkley.
CGN owns a third of EDF’s Hinkley project and will also help it develop another new plant in Suffolk, Sizewell C.
The Chinese company will also lead construction of the plant in Bradwell, Essex, using a Chinese-designed nuclear reactor which needs to gain approval from Britain’s nuclear regulator.
“We expect to complete the second phase of the GDA (generic design approval) by the end of the year and final approval by the end of 2021. The target is for the final investment decision to be made shortly after that,” Davies said.
The HPR 1000 nuclear reactor CGN plans to use at Bradwell is capable of generating 1000 megawatts (MW) but no decision has been made yet about how many reactors would be deployed.
Reporting by Susanna Twidale; Editing by Nina Chestney and Alexander Smith