A leading energy academic and government adviser has called on ministers to take an equity stake in the planned new Hinkley Point C nuclear plant in Somerset, saying it would not make sense to prefer Chinese money.
The comments from Dieter Helm, professor of energy policy at Oxford University, came as trade union leaders accused the government of letting political beliefs override practical and safety issues in the nuclear sector.
In a paper entitled British Energy policy – What Happens Next? , Helm said the British government should issue debt or specific nuclear guaranteed bonds, that could cut the cost of capital from 10% to 2%.
“It is a no-brainer,” said Helm. “Add in the military and security issues of letting Chinese state-owned companies into the heart of the British nuclear industry, and it seems positively perverse to prefer Chinese government money to British government money in so sensitive a national project.”
Helm usually champions free-market methods and is on the economic advisory committee at the Department of Energy and Climate Change.
Meanwhile the attack on government nuclear policy from the GMB union came after comments from Amber Rudd, the energy and climate change secretary, left the door open to Chinese state companies building and operating a new plant at Bradwell, in Essex.
Gary Smith, the union’s national secretary for energy, said the Conservatives seemed ready to allow Beijing to use its own equipment and supply chain in return for funding the new stations at Bradwell and Hinkley Point.
“Energy policy is a shambles because the government is driven by ideology. It will do anything to bring in private or Chinese state money to build British energy infrastructure rather than have it (debt) on George Osborne’s balance sheet,” he said.
This would extend to the Chinese being allowed to ship over large amounts of equipment from Chinese factories, potentially affecting British nuclear safety and as well as hitting UK jobs, he said. Smith noted that an eminent Chinese nuclear scientist, He Zuoxiu, had raised concerns about the safety of his country’s atomic equipment.
The comments from the GMB followed a wider BBC Today programme interview with Rudd on the phasing out of wind subsidies. In the interview the energy secretary sidestepped an opportunity to rule out a Chinese-built and operated plant at Bradwell, saying that any new atomic power station would face stringent British safety regulation.
There has been speculation that the Chinese National Nuclear Corporation has been playing hardball, realising that the French company and British government are both desperate for the cash from Beijing. The Chinese are said to be demanding a right to provide components to Hinkley and to be given a green light to build a new station at Bradwell on its own and with a much greater volume of its own equipment.
The GMB and some industry sources said Beijing wants to use Britain as a shop window to sell its own nuclear designs and capability around the world.
The DECC would not comment on this but denied there was any major worry about the future of Hinkley. “We are still waiting to finalise the project. EDF is still expecting to start power production in 2023.”