China Finalizes Deal to Build Hinkley Point C, 2 Other UK Nuclear Projects

China Finalizes Deal to Build Hinkley Point C, 2 Other UK Nuclear Projects

The price tag of the Hinkley Point C nuclear power project increased as Chinese and British officials signed a deal for three new nuclear construction projects in Britain.

Chinese President Xi Jinping and Britain prime minister David Cameron signed the deal for China General Nuclear Power (CGN) through its new company, General Nuclear International (GNI), to own a 33.5 percent stake in the two European Pressurized Reactors (EPRs) planned for Hinkley Point in exchange for £6 billion ($9.3 billion). EDF will own 66.5 percent, but plans to bring in other investors to bring its ownership share down to 50 percent. The companies also signed preliminary agreements to build reactors at the Sizewell C and Bradwell B power plants in the U.K.

Total construction costs are expected to be £18 billion ($27.8 billion). EDF said the 12.5 percent increase in construction costs reflected an adjustment for inflation, and that underlying costs had remained stable since the initial estimates made in 2013. The plant is expected to begin operations in 2025. The U.K. government approved a £2 billion ($3.1 billion) loan guarantee for construction of Hinkley Point in September.

The signing of the agreement coincides with contracts between the U.K. government and EDF, including a Contract for Difference which sets a price for Hinkley Point C’s electricity at £92.50/MWh in 2012 money for 35 years, or £89.50/MWh if  a final investment decision is made on Sizewell C.

EDF will also take an 80 percent share and CGN 20 percent in the two EPRs planned for the Sizewell C nuclear project. A joint venture will be formed to undertake and manage the generic design assessment process at Bradwell B. That project calls for a U.K. version of a third generation HPR1000 reactor called Hualong based on CGN’s Fangchenggang units 3 and 4 in China. CGN will take a 66.5 percent share and EDF 33.5 percentin Bradwell.

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