UK nuclear power station go-ahead

16 September 2016

EDF's proposed Hinkley Point C nuclear power station in Somerset, UK

EDF's proposed Hinkley Point C nuclear power station in Somerset, UK

Controversial UK nuclear power station Hinkley Point C has been given the go-ahead by the UK government, with the £18 billion (€21.12 billion) project set to be “the first new nuclear power station for a generation”.

Ministers said that it would, however, impose a new legal framework for future foreign investment in Britain’s critical infrastructure, which will include nuclear energy and apply after Hinkley.

There has been a revised agreement with EDF, the French firm building the power station.

The UK government said it would be able to prevent the sale of EDF’s controlling stake before the completion of construction, without the prior notification and agreement of ministers.

It said this agreement would be confirmed in an exchange of letters between the government and EDF. Existing legal powers, and the new legal framework, will mean that the government is able to intervene in the sale of EDF’s stake once Hinkley is operational, it said.

Foreign investment

The new legal framework for future foreign investment in British critical infrastructure was said to mean that after Hinkley, the British government would take a special share in all future nuclear new build projects.

It said this would ensure that significant stakes could not be sold without the government’s knowledge or consent.

The Office for Nuclear Regulation (ONR) will be directed to require notice from developers or operators of nuclear sites of any change of ownership or part-ownership. The government said this would allow it to advise or direct the ONR to take action to protect national security as a result of a change in ownership.

EDF said that it intended, “as stated in October 2015 and in line with government’s requirements”, to retain a controlling stake in the construction of Hinkley Point C.

It said the UK government’s decision to proceed with the nuclear power station in Somerset, south west England, was good news for British consumers and industry.

“Hinkley Point C’s two nuclear reactors will deliver safe, reliable, low carbon nuclear power at a cost competitive with all other future energy options.

“It will be part of a diverse future energy mix designed to give customers reliable and affordable low carbon energy, and help the UK replace its ageing power stations,” said the company.

It added that the government’s examination of the component parts of the deal had “confirmed the acceptability of all the fundamental elements”. This includes the partnership between EDF and the Chinese company, China General Nuclear Power Group (CGN). EDF Energy said it had worked with CGN for 30 years

Signing agreements

EDF said it intended signing agreements with the UK government, CGN and supply chain partners at the earliest opportunity.

Jean-Bernard Lévy, chairman of EDF Group, said, “The decision of the British government to proceed with Hinkley Point C marks the relaunch of nuclear in Europe.

“It demonstrates the UK’s desire to lead the fight against climate change through the development of low carbon electricity.”

EDF Energy CEO Vincent de Rivaz said the announcement was good news for British consumers and gave a huge boost to British industry.

“We remain fully aligned with the British government. We will take the risk and responsibility to deliver Hinkley Point C and provide the UK with the reliable low carbon electricity it needs. The experience and expertise gained from restarting new nuclear build in the UK will help following projects be even more competitive”

The new UK Prime Minister, Theresa May, had caused surprise when she ordered a review of the project, leading to concern over its future – apparently with the Chinese, in particular.

This week, Greg Clark, Secretary of State for Business, Energy & Industrial Strategy, said, “Having thoroughly reviewed the proposal for Hinkley Point C, we will introduce a series of measures to enhance security and will ensure Hinkley cannot change hands without the government’s agreement.

“Consequently, we have decided to proceed with the first new nuclear power station for a generation.”

Regulatory approval from the European Commission was granted in March 2016 to EDF and CGN in relation to the development, construction and operation of three nuclear power plants in the UK – Hinkley Point, Sizewell and Bradwell.

A Laing O’Rourke and Bouygues consortium (BYLOR) signed the main construction works contract for the Hinkley Point project a year ago.

Kier Group, which has been undertaking preparation works at the site in a joint vernture with Bam Nuttall since 2012, welcomed the decision to proceed with the Hinkley Point project.

CEO Haydn Mursell said that his company looked forward to working with EDF on the pipeline of opportunities that would arise from this project.

The first electricity from Hinkley Point C is due to be produced in 2025.

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