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US celebrates ‘win’ as Britain looks to push China out of nuclear energy sites

Washington is celebrating the UK’s effort to push a Chinese company out of a sensitive nuclear power project, according to people familiar with US engagement on the issue. 

The US, long an opponent of the UK’s energy ties with China, considers London’s plans to require Chinese energy giant, CGN to give up its 20 per cent stake in the Sizewell C nuclear plant in Suffolk a long-fought-for diplomatic win. 

The British government’s discomfort with China’s grip on its energy sector has grown in recent months. Meanwhile, the Biden administration launched a fresh drive to protect energy infrastructure from attacks, including cyberattacks, earlier this year.

This plan was created specifically with adversaries Russia and China, and their cyber-hostility in mind, according to a person briefed on the plan.

It comes as the UK has sought to further cement its close security ties with Washington, via the tripartite nuclear submarine deal with the US and Australia termed ‘Aukus’ in recent weeks. The agreement is part of the wider effort to “preserve security and stability in the Indo-Pacific,” prime minister Boris Johnson said in a statement earlier this month which avoided a direct reference to China.

The US has also been examining the energy security of its NATO allies, and their respective dependence on China and Russia. Now, an effort to take control of the CGN stake by the British government is viewed as a pay-off for Washington, after it lobbied London over China’s ties to Britain’s sensitive nuclear energy infrastructure.

“It’s a win for sure, for the US, and for the UK. Serious threats posed by some countries to energy security seem to be getting the right attention,” one of the same people familiar with US energy security policy said.

Britain is weighing taking hold of CGN’s 20 per cent stake in the £20 billion Sizewell C nuclear plant project. The government may then sell the stake to institutional investors, or float it on the stock market, according to a person familiar with the government’s thinking. 

EDF, which holds the remaining share of the Sizewell project and Hinkley point C, declined to comment. CGN did not respond to a request for comment.

There is no official figure which captures the full extent of Chinese ownership of British assets within the energy sector, in part because it is hard to determine the extent of the regime’s use of intermediaries. However, China’s hold over a range of parts of the UK’s energy infrastructure is considerable. 

The Chinese state holds an interest in UK gas distributor, Cadent Gas, via its sovereign wealth fund after the Chinese Investment Corporation led a consortium to buy the network from National Grid. State-backed Chinese companies also own stakes in British oil and gas companies, and renewable energy sites, including windfarms.

CGN is also involved in building the Hinkley Point C site in Somerset alongwith French energy company EDF, offering nearly a third of the investment in the site. Washington was troubled by both the Sizewell and Hinkley projects, but most concerned about plans for a plant in Bradwell-on-Sea in Essex which could use China’s own nuclear reactor technology, rather than following more familiar European technology. 

The same people familiar with US energy engagement expect China to be cut from the Bradwell-on-Sea project. 

A government spokesperson said: “CGN is a valued partner at Hinkley Point C and a shareholder in Sizewell C up until the point of the government’s Final Investment Decision. Negotiations are ongoing and no final decision has been taken.”

The government, which said it believes nuclear power is a crucial part of the energy mix as the UK moves seeks to reduce its carbon emissions, is expected to put forward new legislation on how to fund big nuclear energy projects going forward.

The favoured approach is a regulated asset base (RAB) route, whereby investors can collect money from consumers via energy bills during construction of a power plant.

A representative for the US government did not offer a comment ahead of publication.


Source: UK Politics - www.independent.co.uk


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