A quiet corner of the Suffolk coastline is set to become a new frontier in the debate over the UK’s changing relationship with Chinese foreign direct investment.
Last week EDF submitted a planning application for Sizewell C, a new 3.2 gigawatt nuclear plant which could provide enough power for 6m homes.
The project has been developed in conjunction with China General Nuclear, a state-owned firm which was blacklisted in the US last year after being charged with stealing nuclear secrets.
Sizewell is the second of three nuclear plants that the Chinese government agreed to build in the UK in a deal struck in 2015 with then prime minister David Cameron.
The first of these, Hinkley Point C, was subject to a security review in 2016, but was given the go-ahead by Theresa May’s government the following year.
Given the events of recent months, however, opinion has hardened towards China’s involvement in the UK’s critical national infrastructure.
The Sizewell C plant, which will be a near replica of Hinkley Point C in Somerset, will use French firm Franatome’s designs for its nuclear reactors, but the involvement of CGN, which has the option to take a 20 per cent stake in the plant, has raised hackles, with veteran Tory MP Iain Duncan-Smith labelling it the “next Huawei”.
EDF’s application to build the plant came as Prime Minister Boris Johnson ordered a national security review into the Chinese telecoms’ firms role in building the UK’s 5G networks, with reports that he is now seeking to push Huawei out of the project altogether.
More widely, Johnson has commissioned civil servants to draw up plans for “Project Defend”, a strategy for reducing the country’s reliance on Chinese imports and technology.
Sophia Gaston, director of think tank the British Foreign Policy Group said that recent developments has precipitated “a fundamental reassessment” of Chinese involvement in the UK’s critical national infrastructure:
“The Government will need to determine whether they can continue to confidently make the case for Chinese firms taking even a minor role in the development of infrastructure crucial to our national sovereignty and security – with technology and energy especially sensitive areas”, she added.
Chair of the Foreign Affairs Select Committee Tom Tugenhadt said that the UK was “learning the cost of dependence on Chinese technology”.
He said that the government should seek to copy its international partners in setting up a body to review foreign investment into the UK, as is the case in the US and Australia.
For Tory MP Neil O’Brien, the co-founder of the China Research Group, the question is “whether we want as a country to be able to build a nuclear power station, and if so, what price are you prepared to pay to gain that ability”.
The planning decision, which is expected in 2021, could have significant consequences for the future of the third of the joint EDF-CGN projects, at Bradwell in Essex.
Unlike at Hinkley Point and Sizewell, CGN is the senior partner for the project, with a two-thirds stake.
More critically, it is also planning to use its own Hualong One design for the plant’s nuclear reactor, a decision now likely to come under even more intense scrutiny.
A nuclear future?
The Sizewell case has also thrown up broader questions about the role of nuclear power in the UK’s energy future.
Currently, there are 15 reactors operating in the UK, supplying a fifth of the country’s power, but all but one of these facilities will have been retired by the mid-2030s.
Due to the advances in the cost and deployment of renewable energy that have taken place in the last decade, many are now sceptical about whether nuclear power should take so central a role in the UK’s future energy mix.
However, the independent Committee on Climate Change has modelled that low-carbon firm power generation – such as nuclear should make up 38 per cent of the UK’s future energy mix.
According to EDF estimates, Sizewell C will emit 9m fewer tonnes of carbon from the atmosphere compared to a gas power station of the same size.
And there is also the possibility that the heat from the generation process will be able to be pumped into homes, thus leading to the greening of one of the biggest areas of emission production in the UK.
In particular, much has been made of the cost of such projects, with EDF’s latest estimate putting Hinkley Point C at £21.5bn – £22.5bn.
EDF has not provided an estimate for the cost of Sizewell, but are aiming to save 20 per cent by replicating Hinkley Point.
Executives are also seeking a new funding arrangement known as a regulated asset base (RAB) model, on which the government is currently consulting.
Under this model, which was used for the Thames Tideway project, customers would pay up front for the project through their energy bills, lowering the investment cost for companies.
However, it also runs the risk of landing consumers with the damage should the project overrun or be delayed.
A decision on the model, which was recommended by the National Audit Office, is hoped for alongside the government’s long-awaited energy white paper in the summer.