* Majority stakes possible over time
* Billions in investment needed to replace ageing reactors
* Investment from Japan, South Korea also eyed
* Government, EDF in talks over guaranteed power price
* Osborne visited EDF-CGNPG plant in China
By Jonathan Standing
BEIJING, Oct 17 Britain opened the door to
Chinese investors taking majority stakes in future nuclear
plants on Thursday as finance minister George Osborne signed a
deal aimed at helping find the billions of pounds needed to
replace the country's ageing reactors.
On a visit to China, Osborne said the two countries had
signed a memorandum of understanding (MOU) on nuclear
cooperation that included roles for British companies in China's
nuclear sector, which is the fastest growing in the world.
"While any initial Chinese stake in a nuclear power project
is likely to be a minority stake, over time stakes in subsequent
new power stations could be majority stakes," a statement from
the UK Treasury said.
The MOU also covers training in Britain for Chinese
technicians, it said.
Chinese nuclear companies have expressed an interest in
building in Britain, but until Thursday's announcement it was
unclear whether the British government would welcome China's
The government said this week it was "extremely close" to a
deal with French energy company EDF related to building
Britain's first new nuclear power station since 1995, a project
which is likely to involve China General Nuclear Power Group
That deal centres on a 35-year contract guaranteeing EDF and
its potential partners an electricity price for the power from
the new plant of £92.5 per megawatt hour, roughly double the
current wholesale price, the Wall Street Journal reported.
A spokesman for the UK's Department of Energy and Climate
Change said the talks were ongoing.
Osborne's statement did not refer to the EDF project but his
announcement was made at the Taishan nuclear power plant in
southern China, which is a collaboration between EDF and CGNPG.
Britain aims to renew ageing nuclear power plants that are
going out of service but it needs foreign investment to pay the
huge upfront costs involved.
Britain's shrinking power capacity could lead to blackouts
during the winter of next year, a report prepared for an
advisory body to the prime minister warned on
Energy Secretary Ed Davey said on Sunday he expected nuclear
investments from South Korea as well as China, Japan and France.
Last year, Japan's Hitachi bought a new nuclear
joint venture company from Germany's RWE and E.ON
, underlining interest from Asian firms in entering
Britain's nuclear industry.
Last month, Britain also signed a cooperation agreement with
Russian nuclear conglomerate Rosatom.
Britain has shortlisted eight sites that can house new
nuclear plants, two of which are owned by Hitachi, one by a
joint venture between GDF Suez and Iberdrola
and the remainder by EDF.
The Westinghouse unit of Japan's Toshiba is in
talks to purchase Iberdrola's stake.
Investment from China would similarly involve Chinese
companies buying stakes in projects or partnering with the
"Investment from Chinese companies in the UK electricity
market is welcome, providing they can meet our stringent
regulatory and safety requirements," Energy Secretary Ed Davey
said in Thursday's statement.
China has 17 nuclear reactors in operation, accounting for
about 1 percent of electricity production capacity. Another 28
nuclear plants are under construction.
Osborne is in China on a trade mission that this week saw
Britain take a step closer to becoming the main offshore hub for
trading in China's currency and bonds by offering less stringent
rules for Chinese banks setting up in London.
(Writing by Karolin Schaps in London; additional reporting by
Karolin Schaps and Marie-Louise Gumuchian; editing by Alan
Raybould and Jason Neely)