EDF, Chinese firms to build nuclear plants in the UK: Report

An agreement between the British government and French utility EDF would allow EDF and its Chinese partners to build a nuclear plant in the UK, The Wall Street Journal reported yesterday, citing people familiar with the matter.

The paper said on its website, that under the agreement EDF would hold a 45 to 50 per cent stake in the project, with two Chinese companies, including China General Nuclear Power Group, holding a combined 30 to 40 per cent stake, while French nuclear group Areva would hold about 10 per cent.

EDF had plans for building two Areva-designed EPR reactors at Hinkley Point in Somerset, southwest England, having an outlay of about £14 billion.

Meanwhile, the chancellor, George Osborne, had announced that the UK would allow Chinese companies to take a stake in British nuclear power plants, the BBC reported.

The decision, which the chancellor announced on the last day of a trade visit to China, could see China take a majority stake in the development of the next generation of British nuclear power, the report said.

The first China deal could come as early as next week, with the go ahead for a new £14 billion plant at the Hinkley C site.

Also today, a report commissioned for the prime minister warned of possible power shortages over the next few years.

According to The Royal Academy of Engineering, the closure of older power plants and the slow progress in building new ones would likely stretch the system "close to its limits".

There was a risk of the supply coming under strain in the winter of 2014-15.

Most existing coal-fired plants, were likely to close in 2015 to meet mandatory EU pollution standards, while many gas-fired power plants continued to be idle due to the high price of gas and would take time and money to bring back on stream.

The Hinkley-C project, in Somerset, would be the first new nuclear power station since 1995.

Securing future energy supplies posed a major challenge.

A portion of energy bills was being diverted alternative energy investment in wind farms and solar energy, but these sources would not suffice to meet the UK's energy needs.

Industry regulator Ofgem had also warned of the "unprecedented challenge" to secure power supplies pointing out that spare electricity power production could fall to 2 per cent by 2015, increasing risk of outages.