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CGN in sourcing deal with Rolls-Royce

By Cecily Liu | China Daily | Updated: 2019-01-23 10:16
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Photo taken on July 15, 2017 is the logo of CGN. [Photo/VCG]

Chinese nuclear company in talks to buy control systems from British giant

China General Nuclear Power Group has initiated discussions with British engineering company Rolls-Royce over its nuclear plans in the United Kingdom, just days after Japanese company Hitachi pulled out of plans to build a new power station in North Wales.

CGN is considering buying Rolls-Royce's control systems to use in its HPR1000 reactors.

Regarded as the central nervous system of a nuclear power plant, control systems not only drive the operation of the reactor, but allow it to be shut down safely should problems occur.

"That represents a big commitment to the UK local supply chain," said Andy Storer, CEO of the UK's Nuclear Advanced Manufacturing Research Center. "It should allay any fears the public may have about the Chinese developing a nuclear reactor in the UK."

Former British environment minister Tim Yeo agreed: "It goes a long way to reassure the UK public that Chinese nuclear technology will not cause any security concern."

"Although I've always felt that such concerns are completely unfounded, gaining trust from the general public is also important," added Yeo, who is now chairman of the London-based lobbying group New Nuclear Watch Europe.

A spokesman for Rolls-Royce confirmed the ongoing talks, stressing that the two companies already have a "long-lasting partnership". Rolls-Royce has supplied control systems to 41 nuclear reactors in China, 24 of which were built by CGN.

CGN did not immediately respond to China Daily's request for comment.

The Chinese group first entered the UK market in 2016 when it signed a deal with French company EDF to jointly invest in three nuclear plants: Hinkley Point C, Sizewell C and Bradwell B.

CGN is only a minority investor in Hinkley Point C and Sizewell C, but according to the original deal, it will be the majority investor in Bradwell B, which is also the only plant to use Chinese-developed nuclear technology, the HPR1000 reactor.

If successful, the reactor's deployment at Bradwell B will be the first time ever that the Chinese technology is used in a developed economy.

It will be a flagship project allowing CGN to prove HPR1000's quality, paving the way for Chinese nuclear technology to enter global markets, the company said.

But CGN's UK ambitions have met with public skepticism, as demonstrated in the British media last year.

In an effort to allay public concern, Zheng Dongshan, CEO of CGN's UK subsidiary, said in an interview with the Financial Times last year that CGN is considering reducing its operational involvement at Bradwell.

"We understand the political and local sensitivities," Zheng said. "There is no reason to restrict us as a Chinese investor… but we know we must take time to show the public, the government, they can trust us."

Yeo said CGN's potential collaboration with Rolls-Royce could accelerate this trust-building process, and could help it to take on additional UK nuclear projects.

Last week, Japan's Hitachi scrapped its planned investments at the Wylfa Newydd nuclear plant in North Wales after failing to secure a viable funding solution for its investments. This came shortly after fellow Japanese company Toshiba closed its UK subsidiary in November, leaving the fate of its Moorside nuclear plant in the balance.

Wang Aijuan, power director at UK engineering consultancy Mott MacDonald, said the departure of the Japanese investors makes CGN's commitments more crucial than ever.

Nuclear Advanced Manufacturing Research Center chief storer said it is "completely possible" for CGN to take on one or both of these projects, and the resulting economies of scale would mean that taking on the additional projects would make commercial sense.

Rob Davies, chief operating officer at CGN UK, affirmed the company's ambition to grow when he spoke at an industry event in London in December last year.

"We are currently concentrating on Bradwell B and ramping that up. We want to build a fleet (of new nuclear power stations) in the UK," Davies said.

Meanwhile, Britain's nuclear industry bodies have endorsed CGN's continued attempt to grow the UK's local supply chain.

"CGN's collaboration with the UK supply chain demonstrates its commitment to the UK market," said a spokesman at the UK's National Nuclear Association.

"Hopefully every time UK companies win work from CGN, it will encourage other UK suppliers to consider how they might be able to support the delivery of Bradwell," said Adrian Bull, director of external relations at the UK's National Nuclear Laboratory.

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