Major nuclear deals are expected to be signed during President Xi Jinping's visit to the UK. Although the deals may only involve investment, media reports said that Chinese nuclear firms also aim to bring China's self-developed nuclear power reactor technology to the UK. The investment deals could help establish a foundation for Chinese nuclear technology to gain further acceptance around the world, experts said.
With President Xi Jinping beginning his five-day State visit to the UK on Monday, both countries expect the trip to bear big, juicy fruit. Senior officials from both sides have gone as far as to state that the visit will bring about a "golden era" of bilateral relations.
Recent media reports have speculated that major deals in sectors like nuclear and high-speed railway will be signed during Xi's visit.
Assistant Minister of Commerce Zhang Ji said at a press conference on Tuesday that China and the UK aim to cement their relationship by stepping up cooperation on these kinds of projects.
Specifically, the media has focused on the 24.5 billion pound ($37.96 billion) Hinkley Point C nuclear plant, which has been languishing in the preparatory stages of construction since 2008.
The project, located in Somerset in Southwest England, is a big deal. Run by the French firm EDF Energy, it will be the first nuclear power plant built in the UK in 20 years. Once the power plant is up and running, it will be able to supply 7 percent of the UK's electricity, according to EDF's website.
However, a funding shortfall has dragged on the project's progress. On September 21, the UK government announced a 2-billion-pound loan guarantee for the construction of the delayed power plant. But experts said far more investment is still needed.
Enter China's nuclear power giants. Media reports have said that State-owned China National Nuclear Corp (CNNC) and the China General Nuclear Power Corp (CGN) may strike a deal during Xi's visit to invest in the project.
When contacted by the Global Times, CNNC declined to comment on the matter. Calls to CGN went unanswered.
EDF hopes to announce a deal with Chinese investors to build a nuclear plant at Hinkley Point, Britain, in the coming days, the French utility's chief executive Jean-Bernard Levy said on Sunday, Reuters reported.
Without directly commenting on the possibility of a Chinese investment, the UK's Department of Energy & Climate Change said in a statement e-mailed to the Global Times on Thursday that "the UK welcomes inward investment into the nuclear sector subject to our stringent safety and security regulations."
Still, securing nuclear deals could mean more than just a good return on an investment. The agreements might also lay the groundwork for China to export its nuclear reactor technology abroad, experts said.
The investment-tech connection
So far, the speculation surrounding Xi's visit to the UK has focused on nuclear investment, not nuclear technology.
"CNNC and CGN will mainly participate in financing and management of the plant," the financial news portal yicai.com reported Wednesday, quoting Zhao Chengkun, former head of the National Nuclear Safety Administration (NNSA).
Nonetheless, experts believe that exporting China's nuclear reactor technology is the pot of gold at the end of the rainbow.
"[The Hinkley Point C investment deal] will greatly help further export of China's nuclear technology," Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, told the Global Times on Wednesday.
The Hinkley Point C plant will use European Pressurized Reactors (EPRs), which were developed by France's EDF, Areva NP and Germany's Siemens.
However, the negotiations between the French and Chinese companies for cooperating on Hinkley Point C also include provisions for a proposed Chinese-led nuclear plant in Bradwell, the UK, as well as getting approval for Chinese reactor technology in the country, The Telegraph reported on Wednesday.
If approved, the Bradwell nuclear project would be the first Chinese-built and operated reactor in the West, the Financial Times reported on September 21.
A deal on Bradwell would open the door for the possibility of exporting China's Hualong One third generation nuclear reactor technology to the UK, experts said.
Han Xiaoping, chief information officer at energy portal china5e.com, also noted that the UK has a mature electricity market, which would likely mean a stable return on China's investment.
Under a government subsidy deal, Hinkley Point C's owners will be guaranteed 92.5 pounds for each megawatt-hour of electricity that the plant generates over the next 35 years - roughly double the current market price for electricity in the UK, The Telegraph reported on Wednesday.
Made in China
CNNC and CGN co-developed the Hualong One nuclear reactor, which the National Energy Administration and the NNSA approved in August 2014.
The third generation reactor technology is safer and more efficient than past technologies. However, because it is a new technology, none of the power plants equipped with the third generation reactors has started generating power, Lin said.
The Hualong One reactor is used in the fifth and sixth units of the nuclear power plant in Fuqing, East China's Fujian Province - which will be the first plant ever to adopt the design. Construction of the fifth unit began in May, and it is expected to start generating power in five or six years, according to media reports.
In February, China signed an agreement with Argentina during Argentine President Cristina Kirchner's visit to China. Under the agreement, CNNC and Nucleoeléctrica Argentina SA will jointly develop nuclear power plants in the South American country. The Hualong One reactor is expected to be used.
The Hualong One's major competitors are EDF and Areva's EPR and Westinghouse Electric Company's AP1000, experts said. Both EPR and AP1000 reactors are currently used in some nuclear power plants in China.
Still, the Hualong One has a long road full of obstacles ahead of it. On October 9, CGN said in a statement on its website that the Hualong One has been put in the queue for assessment from the European Utility Requirements (EUR) for LWR Nuclear Power Plants.
"Passing the EUR's assessment is a very important step for the Hualong One to gain wider acceptance in the overseas market, especially in Europe," Lin said.
To enter the UK market, the Hualong One also needs to pass an assessment from the UK government, which could take years, according to the report from yicai.com.
Experts said China's homegrown nuclear technology still has a long way to go before it can be adopted in the rest of the world.
"Whether the Fuqing nuclear power project goes well will be crucial for the Hualong One to gain wider acceptance," Lin said.
