The Chinese were to fund Hinkley Point C in Somerset and Sizewell and then install their own reactors at Bradwell.
However, Mr Kwarteng plans to scrap the agreement in order to implement a new funding system that no longer requires China’s involvement and their installation in Bradwell.
Instead of calling for investors to fund the construction of a nuclear plant and wait several years for a return on investment, Mr Kwarteng wants investors to see a return on their money before the building even starts.
Consumers will be the ones funding the projects through an extra £1 a month to their electricity bill.
Under the new funding model, called the Regulated Asset Base, investors, such as pension funds, provide the upfront capital to get the project under way and the return on investment is immediate.
“Part of the reason that we’ve failed to build more than one nuclear power plant in this country is because there are so few global companies that have the balance sheets that can take on such risks on a single project when they will be no return for at least ten years,” a Government source told The Times.
“This system opens nuclear up to many new investors and bring down the cost of the projects to consumers.”
“In light of rising global gas prices, we need to ensure Britain’s electricity grid of the future is bolstered by reliable and affordable nuclear power that’s generated in this country,” the business secretary said in a statement.
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The Sizewell C nuclear plant in Suffolk on its own will cost around £20 billion and is part of the 60-year project initiated by the Government.
They estimate the two new plants to lower the cost of bills and generate a total saving for consumers of more than £30 billion because the investment would be less risky and therefore attract lower rates of interest.
However, any cost overruns on delays to the project would be borne by the taxpayer rather than investors.