Britain plan to leave Euratom could delay new nuclear build

[January 30, 2017]  By Nina Chestney

LONDON (Reuters) - British plans to leave the European Atomic Energy Community (Euratom) when it exits the European Union could raise costs, delay new nuclear power projects and complicate research and international cooperation agreements, experts said on Friday.

On Thursday, Britain published the legislation it will use to seek parliamentary approval for triggering the process for leaving the European Union, saying the Prime Minister has the power to notify the European Council of withdrawal.

That includes withdrawal from Euratom, an accompanying document to the bill said.

Britain plans to build new nuclear reactors as it faces an electricity supply gap in the coming decade, the biggest of which is the $24 billion Hinkley Point C project being built by French utility EDF.

"Clearly this is something which could impact the industry's complex supply chain and it may well have an impact on Hinkley Point," said Anthony Froggart, senior research fellow at thinktank Chatham House.

He added that EDF has already raised concerns to the UK government about the impact of Brexit on labor movement and trade restrictions which could potentially raise the cost of construction.

In December, EDF said that Britain should "ideally" remain in Euratom, because it provides a framework for compliance with

international safeguards to control the use of uranium and plutonium.

"None of the current new-build projects in the UK are British designs, and most are reliant on foreign technology that is accessible only via the existing bilateral treaties through Euratom," said Vince Zabielski, senior lawyer at Pillsbury Winthrop Shaw Pittman.

"If the U.K. leaves Euratom before new stand-alone nuclear cooperation treaties are negotiated with France and the United States, current new build projects will be placed on hold while those stand-alone treaties are negotiated," he added.

Europe's nuclear lobby group Foratom said Britain will need to negotiate transitional agreements with its partners in Europe if it leaves Euratom.

"The U.K. should remain a member of Euratom until these arrangements are put in place," it said.

Britain also has several international nuclear cooperation agreements with countries outside the EU which are reliant on Euratom safeguards being in place.

Japan's Toshiba and France's Engie, through a joint venture called NuGen, plan to build three reactors in Britain from U.S.-based Westinghouse, while Horizon, owned by Japan's Hitachi, also plans new nuclear capacity.

A spokesman for Horizon said withdrawal from Euratom would present issues which would need to be addressed but the firm is confident they can be resolved so they deliver their lead project on time.

Toshiba said on Friday it would review its struggling nuclear operation, without mentioning the NuGen project.

Euratom is the EU's framework for nuclear energy safety and development, establishing a European market for goods and services and compliance with international nuclear safeguards.

Euratom was formed before the EU in 1957. Although it is legally separate from the EU, it has the same members and is governed by EU institutions.

The Department for Business, Energy and Industrial Strategy said the government is confident it can ensure effective arrangements for nuclear cooperation with Europe and the rest of the world.

(Additional reporting by Susanna Twidale; Editing by Ruth Pitchford)

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