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Theresa May gives green light to Hinkley Point C

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Ministers confirm project pending following ‘new agreement in principle’ with EDF



Prime minister Theresa May has decided to proceed with the build of the first new nuclear power station for a generation, following a review of the Hinkley Point C project, and a revised agreement with EDF.

Hinkley Point C plant in Somerset is planned to be a two reactor plant with a 3,200MW capacity, around 7% of the UK's electricity.

The decision to go ahead with the project comes after years of delays and increased costs, which has risen from an initial £6 billion to about £30 billion. It has also been plagued with technical issues with the nuclear plants European Pressurised Reactor (EPR). Concerns were also raised over China’s 30% stake in the project.

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 agreement in principle with EDF means that the government will be able to prevent the sale of EDF’s controlling stake prior to the completion of construction, without the prior notification and agreement of ministers. This agreement will 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.

The new legal framework for future foreign investment in British critical infrastructure will mean that after Hinkley, the British government will take a special share in all future nuclear new build projects. This, said the government, will ensure that significant stakes cannot be sold without its knowledge or consent.

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

There will also be reforms to the government’s approach to the ownership and control of critical infrastructure to “ensure that the full implications of foreign ownership are scrutinised for the purposes of national security”. This will include a review of the public interest regime in the Enterprise Act 2002 and the introduction of a cross-cutting national security requirement for continuing government approval of the ownership and control of critical infrastructure.

The government said: “The changes mean that, while the UK will remain one of the most open economies in the world, the public can be confident that foreign direct investment works in the country’s best interests.”

Greg Clark, secretary of state for business, energy and industrial strategy, said: “The government is committed to ensuring the country has a secure low carbon energy supply. Hinkley Point C will be a critical part of that, and will inaugurate a new era of UK nuclear power - building on Britain’s strong nuclear legacy.”

Trade unions welcomed the announcement. However, deputy general secretary at Prospect, Garry Graham, stressed that while it is important to protect the security of UK energy infrastructure, it “must not stymie international investment and add greater uncertainty”.

Justin Bowden, GMB national secretary for energy, said: “With Hinkley now confirmed, attention must rightly shift to the other new nuclear power stations - including Bradwell in Essex and Sizewell in Suffolk - which we badly need across the country. The solution however is not to handover the replacement of vital UK infrastructure lock, stock and barrel to China."

Phil Whitehurst, GMB national officer for construction, warned that in regards to the future construction of Bradwell that “GMB will not stand by and watch any discrimination against either the UK supply chain or UK workers.” 

The news has not been as welcomed by the renewables sector. Juliet Davenport, chief executive of independent renewable energy supplier Good Energy, said that the decision to go ahead with Hinkley C is a "bad move" that will leave an inheritance of high energy costs, hazardous waste, security worries, and a plant that needs complex and costly decommissioning.

Davenport added: "No wonder only 36% of the British public support nuclear, compared to a whopping 76% for renewables.

The Low Carbon Contracts Company is to offer a Contract for Difference (CfD) to EDF. The CfD would provide a set price of £92.50 per megawatt hour of electricity provided by Hinkley Point C for 35 years once it begins generating. The difference between the strike price and the wholesale price is paid for through consumer bills.

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