British Treasury guarantee to put Hinkley nuclear plant back on track

The British Treasury said Monday a government guarantee worth more than three billion U.S. dollars will help pave the way for the building of Britain's first new nuclear power plant in 20 years.

The guarantee came just weeks after the French-based energy company EDF announced the proposed Hinkley Point C plant will not start generating power as planned in 2023 because of concerns over investments in the project.

Chancellor George Osborne has insisted new nuclear power stations are essential to make sure the lights stay on, as he personally gave the green light to the initial government guarantee for the Hinkley power plant.

The Treasury in a statement issued Monday in London said the guarantee would be provided by a government investment arm, Infrastructure UK.

A spokesman for the Treasury said: "The initial deal is set to be worth around two billion pounds and will pave the way for a final investment decision by energy company EDF, supported by China General Nuclear Corporation and China National Nuclear Corporation, later this year, and with further amounts potentially available in the longer-term."

The construction and operation of Hinkley Point C, costing around 26 billion U.S. dollars, will create an estimated 25,000 jobs in the southern English county of Somerset and more widely in the nuclear industry across Britain, as well as boosting the country's energy security.

The new plant will have the capacity to produce enough energy to supply seven per cent of Britain's energy needs, powering around six million homes.

The Treasury spokesman added: "It is also expected to open the door to unprecedented collaboration in the UK and China on the construction of new nuclear power stations.

"The agreement also boosts work being carried out under a Memorandum of Understanding on fuel cycle collaboration signed with China in 2014, which has the potential to leverage UK expertise in waste management and decommissioning as well as support UK growth."

During the next ten years, Britain is expected to need to replace around quarter of its capacity due to ageing nuclear and coal power plants retiring, which the new Hinkley Point power station will help achieve.

In a statement Monday, Osborne said: "Britain was the home to the very first civil nuclear power stations in the world and I am determined that we now lead the way again.

"It is another move forward for the golden relationship between Britain and China -- the world's oldest civil nuclear power and the world's fastest growing civil nuclear power."

The Treasury statement included a comment from Vincent de Rivaz, chief executive of EDF Energy. "The government's determination to bring about a renewal of infrastructure and to attract inward investment to the UK are demonstrated by this good news. We welcome the government's support for the industrial participation by EDF and its Chinese partners," he said. Endit