China General Nuclear Power Group (CGN) is interested in buying a major stake in the UK’s nuclear fleet, The Sunday Times reported on 8 July.
CGN already owns 35% of the Hinkley Point C nuclear plant, being built by EDF, and is a majority shareholder in Bradwell Power Generation Company, a joint venture with EDF which is planning to build Bradwell B using Chinese HPR1000 (Hualong One) reactors.
The UK’s eight commercial nuclear stations at Dungeness B, Hartlepool, Heysham A, Heysham B, Hinkley Point B, Hunterston B, Sizewell B and Torness have a total of 15 reactor units and supply about 20% of UK electricity. These are all advanced gas-cooled reactors except Sizewell B, which is a pressurised water reactor.
The plants, formerly owned by British Energy, were bought by EDF in 2008 for GBP12.5bn and in 2009 Centrica (parent company of British Gas) took a 20% stake. Centrica is aiming to sell its share by the end of 2020 while EDF is considering cutting its 80% stake to 51% and has hired Bank of America Merrill Lynch as an adviser. CGN is reportedly seeking a 49% stake in the fleet including Centrica’s shareholding. The stake is valued at around GBP4bn ($5.3bn). Sunday Times sources said China would not have operational control over the plants if the deal went ahead, adding that talks are at a very early stage.
Investing in UK nuclear plants and starting to build a track record may help CGN to gain more potential new projects in UK and Europe, using its own reactor technology.
The UK plants are scheduled to close or be decommissioned between 2023 and 2030. Patrick Dai, a Shanghai-based analyst at Macquarie Group told Bloomberg: “Buying minority stakes in old reactors in the UK – showing commitment and cash support – would be wise before it can engage in any new or replacement plant construction.”
