Official statement says new nuclear power plant will go ahead under ‘revised agreement’ with EDF and with new safeguards for future foreign investment
Hinkley Point C, Britain's first new nuclear power station in a generation, will go ahead after the government today confirmed it has approved the project following a last-minute review.
Ministers said they have imposed "significant new safeguards" on future foreign investments in Britain's critical infrastructure, and agreed new restrictions on EDF's ability to sell its stake in the Hinkley project during or after construction.
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The move follows a surprise delay in government's approval for the controversial £18bn project, after the developers EDF green-lit the project at a board meeting in July.
"Following a comprehensive review of the Hinkley Point C project, and a revised agreement with EDF, the government has decided to proceed with the first new nuclear power station for a generation," the government said in a statement.
"However, ministers will impose a new legal framework for future foreign investment in Britain's critical infrastructure, which will include nuclear energy and apply after Hinkley."
The government also said it has reached an "agreement in principle" with EDF to impose new safeguards on its ownership of the project, enabling the government to prevent EDF from selling its stake in the scheme during construction without the prior notification of ministers. The government will also be able to intervene in the sale of EDF once Hinkley is operational, which is expected to be from the mid-2020s.
Ministers said this agreement would be confirmed via an exchange of letters, which BuisnessGreen understands is something of a formality although no firm timeline has been set out. EDF said it plans to sign agreements with the British government and the project's Chinese backers "at the earliest opportunity".
Hinkley is expected to provide seven per cent of the UK's electricity needs over its 60-year lifetime, with the project now slated to begin generating in the mid-2020s. It will be the first new nuclear plant built in the UK for more than 20 years.
Secretary of State for Business, Energy and Industrial Strategy Greg Clark 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.
"Britain needs to upgrade its supplies of energy, and we have always been clear that nuclear is an important part of ensuring our future low-carbon energy security," he added.
Clark also said he is "minded" to instruct the Low Carbon Contracts Company to offer EDF the "strike price" of £92.50 per MWh - well above the current wholesale cost of energy.
EDF said it is "delighted" with the decision. Jean-Bernard Lévy, chief executive of the EDF Group CEO said it 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," he said in a statement. "This decision demonstrates confidence in the EPR technology and in the world renowned expertise of the French nuclear industry. I congratulate the teams of EDF who have developed this project to maturity with enthusiasm, professionalism and determination."
In response to security concerns over Chinese involvement in Britain's nuclear industry, the government also said it will in the future take a special share in all foreign investments in "critical" UK infrastructure, including future nuclear plants. This will ensure that significant stakes cannot be sold without the government's knowledge or consent," the government said in a statement.
China is providing one-third of the investment for Hinkley C, and hopes to build additional nuclear plants at Sizewell in Suffolk and Bradwell in Essex.
China General Nuclear Power Corporation (CGN), one of the two Chinese companies providing financing to Hinkley, welcomed today's decision."We are delighted that the British government has decided to proceed with the first new nuclear power station for a generation," it said in an emailed statement. "We are now able to move forward and deliver much needed nuclear capacity at Hinkley Point, Sizewell and Bradwell with our strategic partners, EDF, and provide the UK with safe, reliable and sustainable low-carbon energy."
The decision to press ahead with Hinkley is likely to bring relief in parts of Whitehall, where ministers are working to deliver the promised phase-out of the UK's fleet of coal power stations and plug a looming supply gap while meeting the UK's long-term carbon targets. But the project continues to face criticism, with concerns centring on the cost of the project and EDF's ability to deliver on time and on budget.
The controversial project has been beset by delays and spiralling cost estimates, and many environmental campaigners remain vehemently opposed to its development, claiming the money would be better invested in renewable energy.
In response to today's decision, chief executive of WWF-UK David Nussbaum said: "If the government is happy to commit that amount of public money to subsidise this project, we would expect them to do the same for renewables."
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