(Bloomberg) -- The UK’s ambitious nuclear plan took another step forward with state backing for Electricite de France SA’s Sizewell C nuclear power plant, a move that forces China out of the project.
The government will invest about £700 million ($844 million) in the project or 50% of the development costs alongside EDF. The funding includes the acquisition of the shares of partner China General Nuclear Power Corp, marking the firm’s exit from the project, according to EDF.
It’s the first direct state funding of a new nuclear power project for more than three decades in Britain, according to a statement Tuesday. It comes a day after approval for a state-backed financing mechanism. The government had been looking for a way to force Beijing out of the project after relations between the countries became more spiky. The UK is understood to have paid tens of millions of pounds to buy the Chinese firm out of the project.
The UK wants to deliver eight new nuclear reactors this decade -- needing approval at a pace equivalent to one a year. A construction program of this scale hasn’t been achieved in the region since the 1970s in France, and doubts remain about the government’s ability to green-light enough projects by 2030 to meet that goal.
Prime Minister Rishi Sunak’s spokesman Max Blain was asked by reporters if the decision to remove Chinese involvement in Sizewell would mean no future involvement in the UK’s energy supply.
“We would need to make a judgment on what’s right for the UK I think we wouldn’t do anything to put UK security at risk and indeed our focus is on enhancing our energy independence,” Blain said on Tuesday.
On Monday, Business Minister Grant Shapps signed off on the regulated asset base model, the first step toward finding private investors for the project. The model has been used for major infrastructure projects such as Heathrow’s Terminal 5 and the Thames Tideway Tunnel.
Adding new nuclear capacity is key to Britain’s plans to eliminate carbon emissions from its power grid in the coming years. Nuclear power can offer a steady, predictable supply of low-carbon power that can serve as backup for the rapidly expanding fleet of wind farms.
Sizewell’s predecessor, Hinkley Point C, is the first British nuclear power plant to be built in decades. It’s costing more than expected and taking longer to build than planned, stoking concerns about whether the government is right to rely so heavily on the technology. CGN remains a partner in Hinkley Point C.
Once Sizewell C reaches financial close, both the government and EDF will hold a 20% stake with private investors making up the rest. It’s expected to cost at least £20 billion.
Shapps also committed to taking forward the British Energy Security Bill, after it was blocked by his predecessor Jacob Rees-Mogg in September.
--With assistance from Francois de Beaupuy.
(Updates with government comment in fifth paragraph.)
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