Following two years of negotiations, France’s EDF Energy today signed an agreement with state-owned China General Nuclear Power Corporation (CGN) to build the UK’s first new nuclear power plant in a generation, at Hinkley Point in Somerset.
The historic deal was confirmed at a news conference given by UK prime minister David Cameron and Chinese president Xi Jinping on the second day of Xi’s state visit to the UK.
It sees CGN taking a 33.5% stake in the plant for £6bn ($9.3bn), while mainly state-owned EDF would own the remaining stake of 63.5%.
EDF said the plant was forecast to cost £18bn ($27.8bn).
EDF and CGN also signed outline agreements jointly to develop two more nuclear power stations at Sizewell in Suffolk and Bradwell in Essex.
The deal comes almost exactly two years after UK chancellor George Osborne cleared the way for Chinese firms to take a stake in or own up to 100% of new British nuclear power stations.
The UK government said the new plant, which is scheduled to start operating in 2025, would provide power for 6 million homes during its 60-year life.
The cost and risk of building and operating the plant will be borne by EDF and CGN, but the government has guaranteed to buy the electricity for £92.50 per megawatt hour for 35 years, which is more than double today’s wholesale electricity price. Critics label this so-called "strike price" a subsidy.
UK energy secretary Amber Rudd said: "We are tackling a legacy of underinvestment and building energy infrastructure fit for the 21st century as part of our plan to provide the clean, affordable and secure energy that hard working families and businesses across the country can rely on now and in the future."
Photograph: Artist’s impression of the new Hinkley Point C nuclear power station (EDF Energy)