Electricity retailers including Tesco, Sainsbury’s and Marks & Spencer are set to join a consortium led by a Chinese consortium to buy power generation assets from the UK.
The deal, which is likely to be completed by the end of the year, is being hailed as a major coup for the UK and a win for Chinese companies, which have been struggling to attract overseas investment in the energy sector.
The Chinese consortium is the world’s largest operator of wind and solar power stations, with a market capitalisation of $12.7bn.
The group will invest in new power plants to supply electricity to around 7,000 homes and businesses in the UK, where prices have been high in recent years.
The consortium has previously bought power generation for more than $300bn from the US, including projects including nuclear power stations in Illinois and Vermont.
The proposed deal, known as the UK-China Renewable Energy Initiative, will see the purchase of up to 20 megawatts of new generation assets by China’s state-owned electricity giant China National Offshore Oil and Gas Corp (CNOOC), which has invested $1.8bn in Britain.
The UK government has long been keen to promote exports of British-made technologies and have seen China as a potential partner in the sector.
But the deal could mark the first time a Chinese company will buy power plants from the British market.
China has been trying to boost its domestic demand for renewable energy and has been pushing through ambitious targets to ramp up the amount of electricity it produces by 2030 from 30 per cent to 50 per cent.
Britain has been a major buyer of Chinese state-run power companies in recent times, but the latest deal would allow China to take control of more than 20 megawatt-hours of renewable energy capacity.
China currently produces about 50 per 10 of Britain’s total energy needs.