Why hand our nuclear industry to China?

Britain may come to regret signing a deal with the Chinese and French to build a new nuclear power station. Piper Terrett reports.

At last ministers have "found the courage to press the nuclear button", says Alistair Osborne in The Daily Telegraph. The government has signed a £16bn deal with French energy giant EDF (part-financed by the Chinese), to build the Hinkley C nuclear power plant. The plant will create 25,000 new construction jobs and power six million houses.

However, because we've lost the generation that knew how to build these plants, we're going "cap in hand to France and China". Considering that in 1956 we built the world's first major nuclear plant at Calder Hall, "it's hard to find a more literal symbol of lost power".

Not only are we now "reliant on a communist state" with an "opaque" record on nuclear safety, but the costs have jumped by £2bn.

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Meanwhile, the £92.50 strike' price for electricity that EDF has been guaranteed for 35 years twice the current wholesale price is "no bargain". Worse still, the consumer is locked in for 45 years, as the station will take ten years to build. By 2023, experts reckon, consumers could be paying £720m a year over the odds for their energy.

The government should have financed the build itself, using quantitative easing or the £1trn in pension funds. And if nuclear is the future, why is it selling its stake in uranium supplier Urenco?

We need nuclear power, says George Monbiot in The Guardian. Abandoning our main source of low carbon energy "would be madness", leading only to more gas and coal use. But this technology is already "outdated".

Halfway through its operating life, Hinkley will look "as hip as a traction engine". More up-to-date technology recycles nuclear waste. David Cameron "plainly intends" to lose "that global race" he keeps talking about.

The government has justified the deal by saying "there was no alternative", says Nick Butler in the Financial Times. Legislation commits the UK to cutting its carbon emissions, so it had to do something.

Shale gas is unproven, offshore wind expensive and the price of imported gas is volatile. But there are alternatives, and the fact that they were ignored "is what makes this such a poor deal". Yes, there is a case for nuclear but "not at any price".

EDF would have settled for a lower strike price.Energy prices "are not doomed to rise forever". Falling US energy prices are being transmitted internationally. Britain is "locking in high prices" when trends "suggest a structural fall".

Gas is currently a buyer's market Britain could have signed a favourable long-term deal for itself. Improving energy efficiency makes more sense too Japan uses 20% less energy than we do, for example but the Green Deal in the UK has been "an expensive fiasco".

Then there's the sticky question of handing control of our nuclear power plants to China, says Camilla Cavendish in The Times. This is a risk no other country has taken is Britain becoming the "doormat of globalisation"?

World leaders said globalisation would free us from drudgery. But after "bingeing on Polish plumbers and cheap laptops", the countries we sold our technology to have quickly become our rivals.

The Chinese are funding this project to gain knowledge so that they can bypass Western industry. If we keep innovating, we can stay ahead. But we must be careful about how much expertise we hand over.

Most countries see energy as too important to hand over to outsiders. Remember Lenin's words: "Capitalists will sell us the rope with which we will hang them".

Piper Terrett is a financial journalist and author. Piper graduated from Newnham College, Cambridge, in 1997 and worked for Germaine Greer and for Adam Faith’s Money Channel before embarking on a career in business journalism. 

She has worked for most top financial titles, including Investors Chronicle, Shares magazine, Yahoo! Finance and MSN Money. She lectures part-time at London Metropolitan University and is the author of four books.