As the FT reported on Friday, negotiations on the terms for new nuclear have advanced and there is increasing optimism that a deal can be done. The meeting between David Cameron and Francois Hollande in Paris two weeks ago amounted to a declaration of agreement in principle. Just three issues remain to be resolved. Read more

Behind the continuing negotiations on new nuclear in the UK one big question remains unanswered. Who is going to pay? Senior officials are concerned that the pressure to close a deal is undermining a sensible negotiating strategy by separating the terms – including the strike price and the issues of risk allocation – from the question of funding.

To grasp what is happening you have to understand the degree of desperation which now exists in Government to deliver growth. Growth is the justification of the whole economic strategy and of course the solution to the challenge of rising borrowing. Growth is seen as the only platform from which either coalition party can go back to the electorate. But growth is elusive and time is running out. Read more

Is it possible that while one Whitehall Department is constructing a “secret” crisis centre to deal with cyber attacks, another located less than a quarter of a mile away is preparing to sell part of the UK’s national infrastructure to the very people behind those attacks?

The establishment of a cyber security centre was reported by the FT last week. Anyone who doubts that its primary focus is the Chinese should read the report produced a couple of months ago by the specialist US consultancy Mandiant.

The company identified attacks originating in a building occupied by the General Staff Department of the People’s Liberation Army in Shanghai which had targeted 141 companies across 20 major industries. China has denied official involvement but has not yet agreed to stop the attacks.

Unfortunately no one seems to have mentioned these developments to Ed Davey, energy secretary, or EDF, the company which wants to develop new nuclear power stations in Britain. If the price and risk allocation for that deal is agreed, and Mr Davey has said that agreement is close, the next question is how the deal will be funded. EDF does not have the capacity to find the £14bn required and so has been looking to Chinese partners to provide much of the cash. Read more

Sizewell A (left) and Sizewell B (right), two generations of British nuclear power on the Suffolk coast

Sizewell A (left) and Sizewell B (right), two generations of British nuclear power generation on the Suffolk coast

Why is it proving so difficult to close the deal on new nuclear in Britain? In part, of course, there is the normal arm wrestling negotiation. This is focused on the so called “strike price” – an energy price below which the suppliers will get compensation from the state – and on the allocation of risk around a £14bn construction contract.

The UK government wants a strike price of around £65 to £70 per MWh which is high but probably politically defensible. They well remember that in 2008 EDF talked about a price of £45 per MWh. EDF now wants something between £95 and £100, but they can probably afford to accept the Government’s figure and still make a reasonable profit.

The allocation of the risks is even more important than the strike price. Unless the Government is careful it could end up pay enormous sums for capacity which is underused because cheaper supplies will be available to consumers. If the company gets it wrong, a bad deal would overhang its finances for decades. Read more

A number of well-sourced reports over the past two days suggest that, as predicted, we are on the edge of a deal for the construction of new nuclear power stations in the UK.

The champagne corks however are not quite popping either in Whitehall or in Paris. Read more

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The negotiations between the UK government and EDF over the contract terms for new nuclear development continue. As well as a sizeable gap on the strike price there is also disagreement on the distribution of risks. In some ways this is just a normal negotiating process but behind the meetings and the attempts at news management are two questions.

The first is whether the UK really needs new nuclear. Read more

EDF faces probe into its relations with China. Getty Images

A new inquiry instigated by the French government into the international activities of the French nuclear industry poses a new challenge to the UK’s plans for a new generation of nuclear power stations. Further delay in reaching a final decision seems certain.

The formal inquiry, established just before the New Year, will be undertaken by the powerful Inspection Generale des Finances. The inquiry is sector wide and focused on potentially inappropriate transfers of protected technologies through the international partnerships developed by the nuclear companies. But according to the French press the inquiry is directed specifically at EDF and its relationships in China. Read more

Anglo-French relations could hamper negotiations over UK nuclear power stations. Image by Getty

Another European summit, and another step in the progressive disengagement of the UK from the core of Europe. I wonder if the UK government appreciates the impact of what is happening on the real world of business? Let’s take just one example. Relations between Britain and France are at a very low ebb. No one is throwing plates but there is now a mood of mutual indifference, which, as anyone who has lived through a bad marriage will tell you, is worse.

I was in Paris this week visiting the Banque de France. The Banque’s senior management were as ever exquisitely polite, but the sense of distance from the UK was unmistakeable.

Anglo-French relations are always complicated but the current round of problems really began with Franςois Hollande’s visit to London at the end of February. Mr Hollande was at that time a candidate rather than Le President de la Republique. He was clearly ahead in the polls and judged likely to win by the most experienced observers of the French scene. But Mr Cameron, usually a model of politeness when it comes to personal relations, refused to see him. Read more

Japanese company Hitachi buys into nuclear

The news that Hitachi has paid what seems a high price for the Horizon franchise to build new nuclear stations in the UK is good news for the industry. Hitachi has a strong balance sheet and a good technical record – untarnished by Japan’s Fukushima incident. The deal is a tribute to the Department of Energy and Climate Change officials involved and to Number 10′s strong support for the nuclear programme.

Now, only two questions remain. What price will UK consumers pay for nuclear generated power and who will fund EDF’s initial investment in Hinkley Point.

After a long and successful campaign to make nuclear power acceptable within the UK the companies involved in the industry seem to be jeopardising further progress by refusing to spell out the detailed costs of the new nuclear stations they want to build. Read more

By the end of this week bids must be in from the consortia seeking to develop the UK’s new generation of nuclear power stations. It is decision time but the irony is that the key decisions will be taken in Paris rather than London. Read more