Our nuclear power stations could be built by the Chinese after Centrica pulls out of deal for four new reactors

The future of British energy supply could be placed in Chinese hands after a major setback for the Government’s nuclear plant building programme yesterday.
Centrica had been planning to build four plants with the French supplier EDF, but has now pulled out of the partnership.
EDF will now try to rescue the multi-billion-pound scheme by casting around for a new partner, and is talking to the Guangdong Nuclear Corporation, which is owned by the Chinese government.

Changes: Energy giant Centrica has pulled out of a deal to build four news nuclear power plants, including next to the existing Sizewell development on the Suffolk coast

If a deal went ahead, it would mean much of Britain’s future nuclear power supply would be controlled by a consortium which is owned by the governments of France and China.
The building of nuclear power stations to replace existing ageing plants is central to Government energy policy.
Without it, the country faces the prospect of a gap between energy demand and supply within 20 years and even possible blackouts.

Centrica, which owns British Gas, was Britain’s only energy company with the financial resources and expertise to invest in building new nuclear power stations.
Its decision to pull out was driven by concerns at the rise in costs following changes to regulations after Japan’s Fukushima disaster in 2011.
A deal with EDF would have given Centrica a 20 per cent stake in two reactors at Hinckley Point, Somerset and two at Sizewell, Suffolk.

Withdrawal: Sam Laidlaw, Chief Executive of Centrica, claims increased project costs and an extended construction timetable means they must pull out

The company will now write off some £200million that was spent developing the proposal for the stations.
While Centrica will not be building new nuclear reactors, it still retains a  20 per cent stake in eight existing power stations, which are due for closure over the next 20 years.
Centrica chief executive Sam Laidlaw said: ‘Since our initial investment, the anticipated costs have increased and the construction timetable has extended by a number of years.
‘These factors, in particular the lengthening time frame for a return on the capital invested in a project of this scale, have led us to conclude that participation is not right for Centrica and our shareholders.’ 
Centrica is not alone in turning its back on new nuclear plants. Last year, German power giants RWE and Eon abandoned plans to build reactors here.

'The country faces the prospect of a gap between energy demand and supply within 20 years and even possible blackouts'

The uncertainty has been fuelled by questions over how to store the waste. Cumbria recently rejected a plan to store it underground and no alternatives have been identified.

Environmentalists believe the Government should switch investment to alternatives, such as wind. However, building new wind farms is hugely expensive and reliant on subsidies through customers’ bills.
Despite the setback, the Government said it will press ahead with nuclear power.

The Department of Energy and Climate Change said: ‘We are determined to make the UK a leading global destination for investment in new nuclear, which will play a key role in our future energy mix.
‘The decision by Centrica reflects the company’s investment priorities and is not a reflection on UK government policy.’
Greenpeace policy director, Doug Parr, said: ‘The Centrica pull-out has exposed a very troubled UK energy strategy.

‘This Government’s relentless focus on new nuclear has lost us years of investment in truly green energy and it now needs a Plan B to deliver a clean, safe energy system – one that doesn’t depend on deluded estimates of how much nuclear will get built.’
The GMB union said the only option is to nationalise nuclear power, bringing it under UK control, rather than leaving it to the governments of France and China.