LONDON: Britain has agreed to build the country’s first nuclear power plant in a generation, despite concerns raised by the Fukushima meltdown in Japan as the U.K. seeks to secure its future energy needs and cut greenhouse gas emissions.
The government struck a deal with Electricite de France and a group of Chinese investors Monday to build the country’s first nuclear power plant since 1995 – a massive project that will bring in 16 billion pounds ($25.9 billion) of investment to keep the lights on, amid declining supplies of North Sea gas and rapidly escalating fuel costs.
“If people at home want to be able to keep watching the television, be able to turn the kettle on, and benefit from electricity, we have got to make these investments,” Energy Secretary Ed Davey told the BBC. “It is essential to keep the lights on and to power British business.”
The deal for the new reactor, which will be built at Hinkley Point in southwest England, underlines the desperation politicians across Europe face in meeting energy needs amid dwindling fossil fuel resources and rising costs.
Britain has placed nuclear at the heart of its low-carbon energy policy in stark contrast to Europe’s biggest economy Germany, which has vowed to phase out nuclear power in the wake of Japan’s 2011 Fukushima disaster.
The British deal could meanwhile potentially push domestic energy prices up even higher according to experts, and risks stoking a political row over soaring living costs in Britain.
The project is aimed at providing Britain with secure and reliable low-carbon electricity, and will create thousands of jobs.
“Today we have a deal for the first nuclear power station in a generation to be built in Britain,” said Prime Minister David Cameron, who heads a Conservative-Liberal Democrat coalition government.
“This also marks the next generation of nuclear power in Britain, which has an important part to play in contributing to our future energy needs and our longer-term security of supply.”
China General Nuclear Corp. and China National Nuclear Corp., both majority-owned by the Chinese government, will provide 30 percent to 40 percent of the financing.
EDF, which is controlled by the French government, will provide 45 percent to 50 percent.
Areva will take a 10-percent stake in the project.
In reaction to the deal, Areva shares jumped by more than 5.0 percent in midday Paris trade.
The French presidency hailed the agreement as a “historic investment,” after a telephone conversation between Francois Hollande and Cameron.
A statement from the Elysée Palace said that both leaders “welcomed the success of talks between EDF and British authorities on the project to build two ... nuclear reactors at Hinkley Point.”
British anti-nuclear campaigners slammed the deal and urged the government to focus on renewable sources like wind and solar power.
“Instead of subsidizing nuclear energy production, the government should be investing more in safe, clean and affordable renewable energy,” said Kate Hudson, general secretary of the Campaign for Nuclear Disarmament.
Safety has been a huge concern for Japan’s nuclear industry since a massive earthquake and tsunami ravaged the country’s northeast coast and triggered a meltdown at the Fukushima nuclear power plant in March 2011.
Britain has 16 nuclear reactors which provide about 20 percent of the country’s energy needs.
At full capacity, the two new reactors will be able to produce 7 percent of Britain’s electricity, enough to power 5 million homes.
A new power station plans to be operational by 2023.
In a separate development Monday, npower, a unit of the German power giant RWE, became the third major energy supplier to hike domestic prices in Britain.
In recent weeks, SSE and British Gas also raised their prices ahead of the winter season, when energy demand hits a peak.
Ed Miliband, leader of the opposition Labour party, has vowed to freeze domestic energy prices for 20 months if he wins the next general election in 2015.