China General and China National Nuclear Corp Lead Financing In UK Nuclear Deal

Britain has signed a dealt with a French energy company and Chinese investors to build the country’s first nuclear power plant in 18 years, ignoring concerns raised by the Fukushima meltdown in Japan as the U.K. seeks to secure its future energy needs and cut greenhouse gas emissions.

The government struck a deal with Electricite de France and a group of Chinese investors Monday to build the country’s first nuclear power plant since 1995 — a massive project that will generate $25.9 billion of investment to keep the lights on amid declining supplies of North Sea gas and rapidly escalating fuel costs.

“If people at home want to be able to keep watching the television, be able to turn the kettle on, and benefit from electricity, we have got to make these investments,” Energy Secretary Ed Davey told the BBC. “It is essential to keep the lights on and to power British business.”

The deal for the new reactor at Hinkley Point in southwest England, which will generate power in 2023, underlines the desperation politicians across Europe face in meeting energy needs amid dwindling fossil fuel resources and rising costs.

Germany decided two years ago to shut down all of its nuclear power plants by 2022, following years of anti-nuclear protests and the shock of the meltdown at Fukushima, Japan in 2011. But the effort needed to ramp up renewable energy sources to replace domestic nuclear reactors is proving to be costly because the country must build many new wind, solar, water and biomass plants and Germany must overhaul its energy grid to balance the fluctuating supply such power sources provide.

One of the last barriers to the British deal was removed during a visit to Asia last week by Treasury chief George Osborne, who announced that Chinese firms would be permitted to invest in civilian nuclear projects.

China General Nuclear Corp. and China National Nuclear Corp will provide 30 percent to 40 percent of the financing under the agreement in principle announced today, EDF said in a statement. EDF, which is majority-owned by the French government, will provide 45 percent to 50 percent.

The deal is also a boon to China, which relies on foreign technology for its generating stations and is trying to develop its own reactors.