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CHINA
- electricity production:[1] it is set to continue to be "a key part of the energy mix", accounting for approximately 17% of the UK's energy supply.[2]
- However, the UK’s stock of 15 Civil Nuclear reactors is ageing, with 14 of them expected to be shut down by 2030. The Government therefore needs to replace reactors as they are decommissioned—and this is where Chinese investment is focused. That investment has come under increased scrutiny amid rising concern, given the clear security risks in this sector, which the National Security Secretariat (NSS) summarised as:
[the] unique hazards which the dispersal (either malevolent or accidental) of nuclear and radiological material present; the specific international obligations [the Government has] to protect nuclear material and uranium enrichment technology to reduce the risks of nuclear proliferation; and [the fact that] the Civil Nuclear sector includes a range of services beyond electricity generation—notably decommissioning, enrichment/fuel fabrication, and specialist rail/maritime transport, none of which have direct parallels in the Energy sector.[3]
Given these factors, we focused our scrutiny on a case study of the Civil Nuclear sector.
China's interest in the UK Civil Nuclear sector
- Foreign Direct Investment (FDI) in the UK's Civil Nuclear sector is not unusual: the UK's current 15 reactors were all acquired by French company EDF in 2009. However, China has shown a particular interest in five Civil Nuclear power sites, which are at various stages of development: Hinkley Point, Sizewell, Bradwell, Moorside and Wylfa. Chinese investment plans are spearheaded by the China General Nuclear Power Group (CGN), a major state-owned energy company. CGN is one of around 100 strategic state-owned enterprises managed by the State-Owned Assets Supervision and Administration Commission of the State Council (SASAC), and as such is closely and—unlike other Chinese-based companies such as Huawei, AliBaba or TenCent—explicitly linked to the Chinese state.[4]
- China intends to source approximately 20% of its primary energy consumption from non-fossil fuels by 2030. While China's indigenous expertise is clearly growing, they still require foreign expertise to supplement innovation and translate technology into capability, and therefore use their investment in the Civil Nuclear sector both to gain Intellectual Property (IP) and improve their own nuclear capabilities ***.[5] ***.[6]
- However, this accounts for only part of its interest in the UK Civil Nuclear sector. As we have explored in Part One of the Report, China is seeking economic advantage in its quest to become a global superpower. It appears that China regards Civil Nuclear power as
- ↑ 'Briefing Paper: New Nuclear Power', House of Commons Library, 29 July 2020.
- ↑ Department for Business, Energy and Industrial Strategy, Digest of United Kingdom Energy Statistics 2020, 30 July 2020. The UK's nuclear energy output was reduced in 2019 due to a series of prolonged outages at two nuclear plants (Dungeness B and Hunterston B). In 2018, nuclear power accounted for 20% of UK electricity supply.
- ↑ Written evidence—Cabinet Office, 3 September 2019.
- ↑ In 2016, the European Commission found that CGN could not be considered to be independent of SASAC. 'RPT-Chinese state-owned companies face greater scrutiny of EU deals after ruling', Reuters, 13 June 2016.
- ↑ Written evidence—***, *** October 2020.
- ↑ Written evidence—***, *** December 2018.
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