Britain is in talks with the Russian state nuclear company about building a nuclear power station in the UK, an official said on Tuesday.
Hergen Haye, head of new nuclear development at the Department of Energy and Climate Change (DECC), told students at Edinburgh University that active discussions were taking place in London after a memorandum of understanding had been signed with Russia. "I can tell you that, behind closed doors and with microphones switched off, there are interesting debates happening in Whitehall," he said. "Russia wants to build a nuclear power station in the UK."
Haye chairs a UK-Russian working group on nuclear power, and was in Russia recently for discussions. Haye regards the Russian VVER reactor proposed for the UK as "perfectly safe", but he cautioned that there would be problems convincing the public that a deal with Russia was acceptable, especially given the current crisis in the Crimea. "It's a long road, a very long road," he said.
He offered his personal view that a Russian nuclear station in the UK may be "a bridge too far – at least for the next ten years." But he stressed that it wasn't his decision to make.
A memorandum of understanding between DECC and the Russian state nuclear corporation, Rosatom, was signed in September 2013. It agreed a programme of co-operation "designed to be the most effective means of enabling Rosatom to prepare for entry into the United Kingdom civil nuclear market."
The plan was to give Rosatom access to the UK government's watchdogs, the Office for Nuclear Regulation and the Environment Agency, so that it could understand British regulatory and licencing requirements. The Department for Business, Innovation and Skills "will have detailed discussions with Rosatom to facilitate commercial links with United Kingdom's industry," the memorandum said.
Rosatom has already formed a partnership with the British nuclear engineering company, Rolls Royce. "The participants hope that this relationship will lead to joint projects in the United Kingdom and overseas," said the memorandum.
Russia is also reported to have signed a deal with the Finnish power company, Fortum. It operates two Russian VVER reactors near Loviisa in Finland.
In his lecture, Haye highlighted the difficulties of getting private companies to invest in something as commercially risky as nuclear power. He defended the £89.50 per megawatt hour "strike price" for electricity agreed with the French state nuclear company, EDF, for 35 years. This was essential to secure investment in the construction of a new nuclear power station at Hinkley Point in Somerset, he argued. The UK is also seeking Chinese investment in the nuclear station, and has signed a memorandum of understanding with China.
According to Haye, securing money from the Chinese was one of the remaining barriers to actually starting work on the Hinkley station. Another was winning agreement from the European Commission that the strike price deal didn't breach state aid rules. The commission has announced that it is investigating the funding arrangements for Hinkley. Hay said he was about to embark upon a tour of European capitals to try and win backing for the UK's position.
If Chinese funding was secured and the European Commission gave the go-ahead, the earliest work could start at Hinkley was next year, Haye said. Then it could start generating power by 2023.
A DECC spokesperson said: "Last year Russia and the UK committed to working towards greater co-operation in the field of civil nuclear. It is to be expected that government staff will have discussions about how that might develop. Any new nuclear plants will need to meet stringent UK regulations enforced by independent regulators."
"The UK actively welcomes inward investment to our energy sector, but any energy company, nuclear or otherwise, that had an interest would need to meet all independent regulatory standards required in the UK and EU."