A different nuclear model

The accident at Fukushima, in March 2011, had far-reaching consequences for what was, at the time, considered an imminent “renaissance” of nuclear energy. It resulted in a shutdown of Japan’s nuclear plants, which are numerous, while the future plans for them remain up in the air. It also led to Germany’s decision to shut down its nuclear plants by the beginning of the next decade, and increased the potential costs of future nuclear projects, since the European regulators will demand further safety measures. At that time in Western Europe there were two reactors under construction, in Finland and France, both built with French technology, while in the rest of the world around 50 more are on the way.

Now, two years later, the imminent construction of two reactors has just been announced, at Hinkley Point, Somerset, in the United Kingdom. This new project has some features that deserve particular attention. The leading role will be played by Electricité de France (EDF), the French public energy company, but a significant injection of capital will come from two Chinese public companies, China General Nuclear Corp and China National Nuclear Corp. Areva, the French state company that owns the reactor technology, will have a 10-percent share, and the rest will come from EDF and some unspecified minority investors. So the idea advocated in the United Kingdom of leaving the task of building and operating new nuclear power stations to private initiative (and private capital) has ultimately taken the form of a consortium whose capital is almost entirely public and foreign.

The 19-billion-euro investment is to be recouped in the following manner: the British government will pay for the electricity generated during the 35 years following the start-up of the plant at the rate of 109 euros per megawatt-hour — that is, at two to three times the average price of electricity in Europe. This last point will require authorization from the European Commission, which must determine whether these prices contravene the norms that regulate state aid to industry. The project already contains some elements of political and strategic bearing, particularly the presence of Chinese companies. We appear to be looking at the emergence of a new model, which may well become more general, in the manner of undertaking infrastructure projects that require considerable initial investment.