Chinese Bid to Rescue Europe’s Nuclear Industry

The UK still sees nuclear power as a way of combating climate change, but the massive costs mean it is struggling to get new reactors built.

The Chinese are planning to come to the rescue of a European nuclear industry so short of money that it cannot build any new stations without outside help.

The problem is that EDF, the giant electricity utility owned by the French government, does not have the £25 billion (US$38.5bn) needed to build the two huge nuclear reactors in England that it has already agreed to construct, because it is in debt and its partners have pulled out.

The British government, despite its critics’ accusation that the proposed power station at Hinkley Point in the west of England will be an expensive white elephant, still wants to go ahead and is to sign an agreement with the Chinese to finance the deal.

China’s President, Xi Jinping, is due in London in October and is expected to agree with David Cameron, the UK’s Prime Minister, to fund the deal.

Important toehold
The Chinese generosity in helping out is because they will gain an important toehold in Europe, and hope to build their own nuclear reactors on British soil.

This extraordinary reversal in fortunes for the European nuclear industry − which always looked to sell its nuclear reactors to China, rather than the other way round − has come about because new-build nuclear in the west has become impossible to finance in a free market, where it is seen as too risky by investors wanting an early return on capital.

In contrast, the Chinese, have large reserves of foreign currency and no shortage of capital − particularly when there is a strategic aim of getting entry into new markets and gaining new spheres of influence.

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