France's s state-owned Electricite de France SA (EPA:EDF) utility said on Monday that the U.K. has awarded it a contract to build the first nuclear power plant in Europe since the disaster in Fukushima, Japan, two years ago.
The French company and the U.K. government have agreed in principle on key commercial terms for the planned Hinkley Point C nuclear power station, located in southwest England, adjacent to an existing nuclear power plant that is also run by EDF.
A consortium of two Chinese companies will also invest in and help finance the next-generation nuclear power plant designed by Areva Societe (Otcmkts:Arvcf), a leading French nuclear energy company, at a cost of $26 billion.
The new project is expected to generate about 5 percent of England’s generating capacity.
The deal comes as the nuclear energy industry has seen many projects scaled back or killed outright after the Fukushima nuclear power plant was destroyed by a 2011 earthquake and tsunami. Two years later Japanese authorities there still face critical problems with radiation leaks.
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Governments worldwide are skeptical about developing nuclear energy due to political and safety concerns. But they also have ambitious goals of reducing carbon emissions, and nuclear power is an effective choice in that regard.
England faces that same dilemma as it tries to diversify its energy mix and cut its carbon footprint by 80 percent by 2050.
British Prime Minister David Cameron welcomed the deal, saying it will create 25,000 jobs and bring in billions of dollars in investment.
“This also marks the next generation of nuclear power in Britain, which has an important part to play in contributing to our future energy needs,” Cameron said. The prime minister was referencing warnings by regulators that suggest England risks electricity blackouts if it does not begin replacing old power plants.