Energy and security

The Chinese, as reported by my colleague Guy Chazan, are in talks with EDF on sharing the costs of building the new nuclear plant at Hinkley Point in Somerset. Their price is an unspecified “degree of control”. The Russian company Rosatom announced a couple of weeks ago that it was considering joining the game with the aim of building future nuclear stations in the UK. Perhaps we should be grateful that such nice people have taken an interest in the UK’s energy needs. But before we roll over in gratitude perhaps we should consider the links between energy and security.

Energy systems starting with the electricity grid and the distribution networks for oil and gas are absolute central to the workings of a modern economy. In 2000 even a minor strike by a few tanker drivers brought the country to within hours of disaster with the prospect of food supplies falling short and hospitals closing because of inadequate power supplies. Since then the UK has become more dependent on electricity. The servers which transmit information, the networks which control air traffic, the systems which manage financial markets are all dependent on continuous supplies of electricity. Some have localised back up supplies but most are linked into and reliant on the grid. The grid in turn is directly linked to and dependent on supplies from power stations.

In most countries the electricity supply system would be classified as a strategic national asset. I cannot conceive of the US or France – or China or Russia – allowing a foreign country to own and control such a strategic asset. That may sound like backward-looking nationalism but it is also a matter of cold realism. Different countries have different interests and they do not always match. From time to time, there will be disagreements and even conflicts.

When conflicts occur it is natural to seek to disrupt your opponents economic systems and communications networks. I believe in open trade and in developing good international relationships wherever we can. I believe in building links with China and drawing them into the international institutions. But I do believe there is a limit and I would expect them to believe the same.

The Guangdong Nuclear Company and Rosatom are decent companies but it is hard to believe they are as independent of their national governments as most western energy companies.

If EDF are indeed inviting the Chinese in to the Hinkley Point deal, and pressing for them to be given a degree of control, I hope they will match what they are proposing for the UK with a comparable step in France. If EDF and the French Government are ready to hand over to the Chinese significant access to the French nuclear sector and the French electricity system it might be possible to take more seriously what they are suggesting should happen in Britain.