French energy company, EDF and China Nuclear Power Corporation (CGN) have today signed a Strategic Investment Agreement for the construction and operation of the proposed Hinkley Point C nuclear power station in Somerset.
Chinese Premier Xi Jinping is expected to formally seal the deal later today. The premier is in the UK on a state visit this week and is due to meet Prime Minister David Cameron later.
Under the Strategic Investment Agreement, EDF’s share of the power station will be 66.5% and CGN’s will be 33.5%.
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EDF has said that the final cost of the plant will be £18bn, with CGN paying £6bn for a one-third stake.
Without reducing its initial stake to below 50%, EDF is intending in due course to bring other investors into the project.
CGN is expected to make its investment in the UK through a new company, General Nuclear International (GNI).
Predicted to be opened by 2025 and create 25,000 jobs, the new plant is expected to produce enough energy to supply 7% of the UK’s needs, powering around 6m homes.
However, the Hinkley Point project has garnered considerable criticism, not least the cost and the delays to investment decisions.
The Government has also come under fire for guaranteeing a price of £92.50 per megawatt of electricity for the electricity Hinkley produces – more than twice the current cost.
Critics the likes of Greenpeace say that such a guarantee could result in higher bills for consumers.
Opponents have also raised concerns over allowing China to have a central role in Britain’s nuclear future.
In principle, EDF and CGN have also agreed a wider UK partnership for the joint development of new nuclear power stations at Sizewell, Suffolk and Bradwell, Essex. A finalised agreement is expected to be reached before the final investment decision for Hinkley Point C.