In 2015, Britain signed a deal for China to get involved in the country’s nuclear power system. But now concerns have been growing in the government about Chinese companies participating in sensitive infrastructure like nuclear generating stations. And there is concern whether other investors will want to get involved in a project part-owned by China.
The announcement said the change in financing was aimed at encouraging a wider range of private investors and “reducing Britain’s reliance on overseas developers” but makes no mention of how China’s role will be resolved.
Under the new deal, the government says, rate payers will share some of the project’s construction costs through charges on their bills. These levies will be small — less than a pound a month during the long construction phase — and will ultimately save consumers at least £30 billion over the life of a plant because financing costs will be lower, the government said.
A similar financing arrangement was used to built other British projects including a new terminal at Heathrow Airport.
Much will depend, analysts say, on how the regulations governing these arrangements are written and enforced.
The new system “has great potential for lowering costs, provided that a robust regulatory mechanism is in place to ensure that the potential for cost overruns is minimized,” said Vincent C. Zabielski, a London-based special counsel, who works on nuclear issues at Pillsbury, a law firm.