Britain approves Hinkley Point nuclear deal

Men work at the Hinkley Point C nuclear power station site near Bridgwater in Britain, August 4, 2016. photo source: REUTERS/Darren Staples

China has a one-third stake in the Hinkley Point project, and analysts have warned that Britain would have risked its relations with the world's second-largest economy if it cancelled.

The announcement came two months after Prime Minister Theresa May ordered a review of the £18 billion (21 billion euro, US$24 billion) deal brokered under her predecessor, David Cameron.

The board of French state-owned power company EDF had already approved its participation in the project in southwest England in July when May's government said it wanted to review it.

"Having thoroughly reviewed the proposals for Hinkley Point C, we will introduce a series of measures to enhance security and will ensure Hinkley cannot change hands without the government's agreement," Britain's Business Secretary Greg Clark said in a statement.

"Consequently, we have decided to proceed with the first new nuclear power station for a generation".

A separate government statement said there had been a "revised agreement with EDF" and that new laws would be introduced to govern future foreign investment in critical British infrastructure.

"Existing legal powers, and the new legal framework, will mean that the government is able to intervene in the sale of EDF's stake once Hinkley is operational," the statement added.

May called French President Francois Hollande on Wednesday evening to tell him that the British government had approved the project, the French presidency said.

KEY STRATEGIC DEAL

Critics of the project have argued that the price for power generated by Hinkley is too high and that the technology is outdated.

May's joint chief of staff, Nick Timothy, made his scepticism over the security aspects of China's involvement in the project clear last year.

It was "baffling" that Britain had welcomed investment by state-owned Chinese companies given fears they could build weaknesses into IT systems, "which will allow them to shut down Britain's energy production at will," Timothy wrote in a blog.

Campaigners against the project were due to hand in a 300,000-signature petition to May's Downing Street office later on Thursday with environmental watchdog Greenpeace.

"Consumers can tell that the project may be unconstructable, requires vast subsidies and would generate electricity too expensive to use," Stop Hinkley spokeswoman Sue Aubrey said in a statement.

Criticism has focused on the growing difference between an electricity price guarantee for EDF, subsidised by the British taxpayer, and current falling energy prices.

China's one-third stake in the deal was sealed last year on a state visit to Britain by Chinese President Xi Jinping.

Under the deal, Beijing's state-run China General Nuclear Corporation (CGN) is set to finance £6.0 billion of the costs, with EDF providing the remainder.

The Hinkley facility will not be operational until 2025 -- two years later than originally planned when the deal was first unveiled.

The pair also reached agreement on a partnership to develop nuclear power stations at Sizewell, on the eastern English coast in Suffolk, and at Bradwell in Essex, southeastern England.

The Financial Times reported that Downing Street had been particularly concerned about the deal to build plants at Sizewell and Bradwell.

The latter would be led by CGN using its own technology.

The newspaper quoted an unnamed senior industry figure as saying that the green light for Hinkley would likely be conditional on new "scrutiny or oversight" of Bradwell.