A government campaign to usher in the next generation of nuclear power in Britain hit a major snag when German companies, scared off by the crisis last year at Japan’s Fukushima plant, pulled out of plans to build new reactors here. But another investor with deeper pockets has stepped in: China.
Chinese state corporations are backing consortiums that are vying to build nuclear plants here in a deal that pits the security interests of Washington’s closest ally against the commercial considerations of a country desperately seeking to modernize its aging energy grid. The possible entry of China as Britain’s nuclear benefactor is being seen here and across the region as a test case not only for the viability of nuclear energy in a post-Fukushima world, but also for how far fiscally strapped European governments will go in their quest for cash.
(CARL DE SOUZA/AFP/GETTY IMAGES) - A protester holds a Campaign for Nuclear Disarmament banner near No. 10 Downing Street in London on March 20, 2011. Britain, a country with dwindling North Sea gas reserves, remains one of the few major Western nations still eyeing a massive rollout of new nuclear plants.
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The bid marks the largest and most controversial of China’s recent investments in Britain — which range from the revered Savile Row tailors Gieves & Hawkes to a stake in the Thames Water utility company — and would add to a string of Western world investments by Beijing that also includes the pending takeover of Nexen, a Canadian oil firm with operations in the Gulf of Mexico.
To the dismay of critics who fear the implications of Chinese influence over the energy sector — and particularly over nuclear power generation — the British government has generally blessed the notion of China’s involvement. As one Energy Department official here put it, London is sending a signal to Beijing that Britain “is open for business.”
“Problem is, I don’t see anyone else but the Chinese rushing to invest in this area right now,” said Nick Butler, a former energy sector adviser at No. 10 Downing St. and a critic of the deal. “They are the only ones with the money. If you know of anyone else, please send them to the government.”
The pending deal underscores how differently the United States and Europe view China. European countries do not entirely share the U.S. perception of Beijing as a strategic competitor but instead increasingly see a financial patron, with Chinese investments in a key port in troubled Greece and a power company in hard-hit Portugal illustrating its role as banker and investor where others fear to tread.
At the same time, the future of Britain’s next-generation plants could potentially become a bellwether for the willingness of Western governments to continue embracing nearly zero-emission nuclear power as part of their efforts to reduce greenhouse gases — or whether what was once billed as a “nuclear renaissance” fails to truly take off.
“As an industrialized power with a strong climate objective, the U.K. should commit to exploring a portfolio of options, including nuclear, and to open competition, including China’s participation,” said Nicholas Stern, a climate change expert at the London School of Economics and an honorary adviser to the China Investment Corp., the official name of its sovereign wealth fund.