Beijing’s growing confidence in its plans to help build new reactors at Hinkley in Somerset and Bradwell in Essex has been underlined by the recent incorporation of seven new Chinese nuclear-related firms in London.
It appears, however, that an agreement between China and its partner EDF of France to develop the first new reactors in Britain for 20 years has still not been signed.
Beijing’s creation of so many new businesses could further alarm those concerned at the degree of complexity surrounding the £18bn Hinkley scheme.
Documents from Companies House show the recent listing of General Nuclear System Limited and Bradwell Power Holding Company alongside more opaque entities such as Libra International and Sagittarius International.
All seven companies use the same Stratton Street address in Mayfair, west London used by the state-owned China General Nuclear Power Corporation. They also have the same director, Zhu Minhong, the public face of China’s nuclear power business in Britain.
Zhu appeared with Vincent de Rivaz, the chief executive of EDF Energy, before parliament’s energy and climate change committee 10 days ago, and stressed China’s optimism about building nuclear power plants in Britain.
A spokesman for China General Nuclear Power Corporation, where Zhu is a general director for the UK, said he could not immediately explain why so many new UK-based businesses had been established or their exact purpose.
The Chinese company announced at a highly publicised signing ceremony in London last October that it would be taking a one-third share in Hinkley Point C alongside EDF, and that it also planned to construct and operate its own locally designed reactors at Bradwell.
Despite heads of agreement being signed off during the visit of the Chinese president, Xi Jinping, EDF and China Nuclear had still not completed the final legal documents in February as the wider Hinkley go-ahead remained stalled while the French power company demanded more financial support from Paris.
EDF declined to spell out exactly what the current situation was, but referred to the statements Zhu made at the select committee when he said: “We have agreed the package deal in terms of the heads of terms. We then spent our time to translate the heads of terms into long-form. What I can say today is that our discussions [are] practically completed.”
Peter Atherton, a utility analyst at Jefferies investment bank in London, expressed concern about the complexities of the wider Hinkley programme, noting that EDF had spoken of having “thousands and thousands” of pages of legal documents to be signed off with it Chinese counterparts.
“Complexity is itself a warning that this project is likely to run into some kind of problem. Often when you have a major infrastructure project that runs into problems, say the [London] tube PFI, complex contracts have added to the risk and uncertainty over who bears the responsibility for which costs.
“I would be staggered if anyone in government could tell you where exactly the risk lay [with regard to Hinkley].”
The Department of Energy and Climate Change said: “Hinkley Point C is a major infrastructure project which will boost our energy supply and our economy, bringing in billions of pounds of investment into the UK and creating 25,000 jobs during construction.
“A deal of this scale is by its nature complex, but we are clear on the construction and financing risks, which fall firmly on the developer rather than bill payers.”
