Xi's State Visit Breathes New Life into Hinkley Point Nuclear Power Station

The front of Hinkley Point A nuclear power station near Bridgwater on November 12, 2013 in Somerset, England. [Photo: CFP]

There was a time in the UK when there used to be a three-day working week due to power outages. This was instigated due to coal strikes in the 1970's and these lead to mass protests and an eventual collapse of the government. Following such events, subsequent governments in the UK have made power provision a priority and were able to take measures to keep the lights on in the UK.

Now the government seems to be in a bit of bother because the energy situation in the UK is in a mess. At one hand the government has to cut back on its cheapest source of energy which is coal, owing to the Climate Change Act 2008 that "commits the UK to reducing emissions by at least 80% in 2050 from 1990 levels". The current energy mix of the UK encompasses, energy from coal standing at 30%, Gas at 30%, nuclear at 19%, wind at 9.5%, Bioenergy at 6.8%, Hydro at 1.8% and solar 1.2%.On the other hand UK needs to shift this burden on other sources of energy which is through gas and renewable energy sources, until a more permanent solution can be set up through new nuclear power plants. The problem with gas is that it is expensive as compared to coal, thus instigating a price hike. The issue with renewable sources is that UK is not an ideal place for solar energy and wind energy comes under the scrutiny of disturbing the coastal scenery plus it's expensive and there is a problem of storage. same is the case with bioenergy and the options for hydro are limited, thus giving rise to the urgency of nuclear power which is a more sustained and long-term clean energy source, but government's efforts in trying to establish nuclear plants has also been plagued by various issues.

In order to move towards nuclear energy, plans for the Hinkley point nuclear power plant go as far back as 2005, the time of Tony Blair, the then Prime Minister who was a proponent of UK's need to shift its burden of energy production to nuclear energy. following the government's will and support, French nuclear energy giant EDF stepped in and decided to take on this task and announced delivery of electricity by the winters of 2017, but subsequent events related to the environment and the Fukushima disaster in 2011 heightened concerns over safety protocols and arrangements which further delayed the project at first till 2019 and now till 2025. The Hinkley C project, in Somerset, will be the first new nuclear power station since 1995.

Delays in the Hinkley Point Power Station instigated shareholders to withdraw their stakes, leaving EDF in a tough spot to hunt for new investors. Any further delays in the Hinkley Point Power Station would result in a serious energy shortage for the UK and this is something, the government of the UK cannot afford. with such problems spanning almost a decade the Hinkley point nuclear power station seemed to be jinxed, until China stepped in to the bidding and agreed to take a one-third stake in French power giant EDF's ?25 billion (34-billion-euro) nuclear power project. The exact Chinese share stands at 33.5-percent in the construction of two reactors.

The signed deal is between EDF, China General Nuclear Power Corporation and China National Nuclear Corporation. The Chinese firms are no less than giants themselves in terms of experience and latest technology as they are responsible for China 23 operational nuclear energy generating units and the other 27 which are under construction. China is shifting to nuclear energy because of its urgent need for clean energy. According to China's plans to go nuclear in terms of energy it will have the most number of nuclear power plants in the world by 2030 which are forecasted to stand at 110 and will surpass USA which currently has around 100 nuclear power plants.

This nuclear deal is a win-win for both the countries and Liu Xiaoming the Chinese ambassador to the UK while speaking on BBC1's Andrew Marr Show said the deal to build a new nuclear power plant at Hinkley Point is "in the best interests of Britain and also in the interest of partnership between China and UK."This partnership is helping the UK overcome its brewing energy crisis while China also has a lot to gain from this deal. The UK government has announced ?2 billion in loan guarantees, which sweetens the deal by cutting financial risks for the investment and it also opens doors for the Chinese firms to build more nuclear power plants in the UK because the government announced that "over time, stakes in subsequent new power stations could be majority stakes". This deal not only opens door for the Chinese nuclear giants in the UK but beyond. As for now China has invested in setting nuclear power plants in Argentina and in Pakistan, but UK is a big fish in the world economy and apart from merely earning profits from this investment, this deal as described by Mr. Osborne which is a deal between "the world's oldest civil nuclear power and the world's fastest growing civil nuclear power," acts as significant merit badge earned by China General Nuclear Power Corporation and China National Nuclear Corporation which raises their bar of credibility and it sends a clear signal to the world that any country wishing to enhance the share of nuclear energy in the energy mix can and should set their sights on China for the investment.

The Author: Shafei Moiz Hali has a master's degree from George Mason University, Virginia, USA in the field of International Commerce and Public Policy. Mr. Hali has been working as an Assistant Professor at the National Defence University (NDU), Islamabad, Pakistan with the department of Government and Public Policy Since 2009. Currently he is pursuing his PhD from the College of Public Administration at the Huazhong University of Science and Technology (HUST), China.