A controversial Chinese company has been selected to bid for millions of pounds of public money in a UK government competition to develop mini nuclear power stations.

The China National Nuclear Corporation (CNNC) features twice in a government list of 33 projects and companies deemed eligible to compete for a share in up to £250m to develop so-called small modular reactors (SMR).

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The involvement of a different Chinese company in the high-profile Hinkley Point C project in Somerset was widely believed to have prompted the government’s decision to pause the deal at the 11th hour last month.

Nick Timothy, Theresa May’s co-chief of staff, has previously expressed alarm at the prospect of CNNC having such close access to the UK’s energy infrastructure because it would give the state-owned firm the potential ability to build weaknesses into computer systems.

The company was formerly China’s Ministry of Nuclear Industry and developed the country’s atomic bomb and nuclear submarines, as well as being a key player in its nuclear power industry.

In an article on the ConservativeHome website, Timothy singled out CNNC’s military links as a reason the UK government should be wary of such involvement.



“For those who believe that such an eventuality [shutting down UK energy at will] is unlikely, the Chinese National Nuclear Corporation – one of the state-owned companies involved in the plans for the British nuclear plants – says on its website that it is responsible not just for ‘increasing the value of state assets and developing the society’ but the ‘building of national defence’,” he wrote.

Tom Burke, chairman of the environment thinktank E3G and a former British government adviser, said there were legitimate concerns over the company. “I don’t fuss very much about the Chinese owning a nuclear power station [China General Nuclear in the case of Hinkley]. But I would be much more concerned about bringing in CNNC because they are known to be much more closely involved with the military and Chinese nuclear weapons programmes,” he said.

CNNC was not involved in the original Hinkley deal but it was reported on Sunday that the company has agreed in principle to buy half of China’s 33% stake in the £24bn project if it goes ahead.

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The list of companies accepted for the competition was published briefly, apparently accidentally, on the website of the new Department for Business, Energy and Industrial Strategy on Friday before being deleted. It reads as a who’s-who of US, British, Japanese and Chinese industry players hoping to develop and build small modular reactors. These are much smaller than conventional nuclear plants with a capacity of less than 300MW – or a 10th of what Hinkley Point C should provide.



They are pitched by industry as a cheaper and quicker way to provide low-carbon energy capacity than conventional big nuclear plants because they could be built in a factory and transported to where their power is needed. The US and UK are racing to be the most attractive home for the first of the new designs to be commissioned.



Last November, George Osborne promised £250m over five years for a nuclear research and development programme to “revive the UK’s nuclear expertise and position the UK as a global leader in innovative nuclear technologies”. An undisclosed amount of that sum is for a competition to find the best value SMR design for the UK, to “pave the way” towards building one in the UK in the 2020s.



CNNC sits alongside US companies such as NuScale; British ones including Rolls-Royce, Sheffield Forgemasters and Tokamak Energy; Japanese-owned Westinghouse; and the US-Japanese partnership GE-Hitachi, as participants the government considers eligible for phase one of its competition.



CNNC’s chief designer of small nuclear plants visited a conference in London last year to pitch a plan for cooperating with UK industry, and is already partnering with Rolls-Royce. It hopes to build the first SMR in the UK, with future ones sold around the world.



NuScale Power put itself forward for the competition in the spring. Its design, said its managing director, Tom Mundy, “answers the particular needs of the UK’s energy market and the wider UK economy, and we intend to participate fully in the government’s competition”.

The 33 participants will be whittled down in several phases, with the announcement of the eventual winners scheduled for late 2017.

Announcing the postponement of the Hinkley decision last month, the business secretary, Greg Clark, said: “The UK needs a reliable and secure energy supply and the government believes that nuclear energy is an important part of the mix.”



When asked about the list published on Friday, a spokeswoman for the Department of Business, Energy and Industrial Strategy, said: “In March 2016, the government launched the first phase of a competition to identify the best value SMR for the UK. The ambition is to create an opportunity for the UK to become a world leader in SMRs.

“Those companies which are eligible to participate in the competition have been aware for over two months.”