London: Britain has drawn up laws that will effectively boot out...

London: Britain has drawn up laws that will effectively boot out China from its nuclear plants as it looks to Australian super funds to help support its path to achieving its net-zero climate goals.

© Latika Bourke US pollster Frank Luntz speaks to British Cabinet Minister Kwasi Kwarteng at the Conservative Party Conference in Manchester, Wednesday, October 6, 2021. Photo: Latika Bourke

The British government has been facing a sustained campaign by MPs who want it to stamp out Chinese involvement in critical infrastructure, following the years-long tussle that eventually resulted in the UK adopting Australia's ban on Huawei.

Under the new model, Britain will seek a broad range of private investors from allied countries to fund new plants. One of its key targets will be Australia's super funds which are worth nearly $4 trillion and favour the long-term and low-risk investment options that energy infrastructure projects provide.

It will also oblige consumers to pay a small amount, estimated to be a "few pounds per month" via their electricity bills to help fund the plants' construction.

This method, called the Regulated Asset Base (RAB) model was used to build Heathrow Airport's newest terminal.

Currently, the scheme seeks major investors who take on more of the risk of building the new infrastructure but yield higher returns. The government says the RAB method will also lead to longer-term savings for consumers of about £30 billion ($50 billion).

A Chinese state-owned company blacklisted in the United States, CGN, had applied to build Britain's Sizewell reactor with its French partner EDF. China would have held a 20 per cent stake.

While the legislation won't block any single investor by changing the funding mechanism, the demand from new investors may be strong enough to make up for the stake CGN might have held.

Business Secretary and cabinet minister Kwasi Kwarteng, who drew up the changes, said they were about guaranteeing investment certainty.

"We urgently need a new approach to attract British funds and other private investors to back new large-scale nuclear power stations in the UK," he said.

"Our new model is a win-win for nuclear in our country. Not only will we be able to encourage a greater diversity of private investment, but this will ultimately lower the cost of financing new nuclear power and reduce the costs to consumers and businesses," he said.

Former Conservative leader Iain Duncan Smith and one of the British co-founders of the Inter-Parliamentary Alliance on China (IPAC) told The Sydney Morning Herald and The Age the result was a big win for those demanding the government rid Britain's critical infrastructure of Chinese involvement.

"IPAC has been campaigning on this and at last the government is beginning to listen, we're winning the battle - this was one of our targets to get rid of Chinese investment, so I welcome this," he said.

Around 16 per cent of Britain's energy supply comes from nuclear-powered plants. The same CGN-EDF consortium is building the first of the country's new plants - Hinkley Point C in Somerset, England.

Nick Timothy, who served as chief of staff to then-prime minister Theresa May tried to stop it from going ahead in 2016 but was unsuccessful.

"This is undeniably unalloyed good news and marks an important step for keeping China out of our critical national infrastructure," he told this masthead.

The Sizewell C media team released a statement welcoming the new legislation before Parliament: "70 per cent of the construction value will go to British companies and the legislation means Sizewell C could be majority-owned by British investors.

"Sizewell C will provide home-grown low carbon electricity to 6 million households and will help to reduce our reliance on energy imports. It will play a key role in helping the UK achieve net zero," the statement said.

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