UK's guarantee seen boosting China nuclear energy role
Updated: 2015-09-21 20:18
By Cecily Liu(chinadaily.com.cn)
|
|||||||||||
Hinkley Point A and B nuclear power stations are seen behind the site where Hinkley Point C nuclear power station will be constructed in Bridgwater in south west Britain, in this file photograph dated October 24, 2013.[Photo/Agencies] |
British Chancellor George Osborne's announcement in China of a 2 billion pound guarantee for the Hinkley Point nuclear project is seen as further political support for the project and a boost for its final investment decision, experts say.
"The guarantee is a signal sent out by the British government that Britain is still committed to nuclear energy, and this would help to give confidence to the French and Chinese investors, said Andrew Shepherd, senior power and renewables analyst at BMI Research.
"For a large project like Hinkley, to have a guarantee for some of the early stage investment is helpful for investors, as it reduces the level of risk they have to bear," Shepherd said.
The project, led by France's EDF Energy, has previously announced delays because of a funding gap that exists after the French company Areva withdrew its 15 percent investment after the company encountered financial difficulties.
The 24.5 billion pound Hinkley Point nuclear plant will have investment from two Chinese nuclear companies, China General Nuclear Power Group and China National Nuclear Corp. The two parties are expected to announce the final investment decision soon, although no precise time has been announced.
Nuclear cooperation is a big part of Osborne's China visit, as he has previously expressed the UK nuclear industry's intention to work more closely with Chinese partners.
The guarantee is a promise by the British government to give the Chinese and French partners 2 billion pounds of their capital back if the project falls apart after the initial investment stage. In practical terms, it means if developers went bust, the taxpayer would step in and repay a 2 billion loan to any commercial lenders.
It is a way of appealing to private backers and persuading them to support the project developers. It remains highly questionable as to whether EDF and its partners could raise the necessary financing to support the project without the guarantees.
Vincent de Rivaz, chief executive of EDF Energy, said that the Chancellor's announcement of the infrastructure guarantee is a clear sign of the government's commitment to Hinkley Point.
"The government's determination to bring about a renewal of infrastructure and to attract inward investment to the UK are demonstrated by this good news. It is further progress towards a final investment decision on a project which will provide reliable, affordable low carbon electricity for decades," de Rivaz said.
"We welcome the government's support for the industrial participation by EDF and its Chinese partners," de Rivaz said.
Shepherd said that the initial 2 billion pound loan guarantee will probably be the first of several, assuming the project proceeds. The Government has received EU state aid clearance to guarantee up to 16 billion pounds for the project via Infrastructure UK, a government agency.
"This 2 billion could get the project off the ground, but in terms of the overall costs of the project the amount in absolute terms is still small," said Shepherd.
Christopher Bovis, a business law professor at the University of Hull, said that the extra 2 billion pounds "is extremely crucial for the viability of the project."
Related Stories
China welcomes UK's Eden Project 2015-09-21 17:28
UK nuclear industry has high hopes 2015-09-21 07:20
UK Labour leader Corbyn takes on ritual at first Cameron duel 2015-09-16 21:47
China business group in UK changes its name 2015-09-15 17:42
China to build nuclear reactor in UK 2015-09-15 10:03
Today's Top News
UN observes International Day of Peace
Tsipras returns to fight for Greek economy, debt relief
Hungary authorises govt to use army in migration crisis
Chinese think tank predicts 6.9% GDP growth for 2015
White paper highlights gender equality
Women's development in China contributes to global equality: white paper
UK's guarantee seen boosting China nuclear energy role
UK nuclear industry has high hopes on Chinese investment
Hot Topics
Lunar probe , China growth forecasts, Emission rules get tougher, China seen through 'colored lens', International board,
Editor's Picks
Solutions elusive in Syrian refugee crisis |
Stepping up |
Rural families still hope for male heirs |
Blue skies over Beijing ... for now |
V-Day parade for 70th WWII anniversary |
Tianjin blasts: Death, damage and bravery |