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As EDF board backs £18bn nuclear plant..

Government throws Hinkley plan into doubt

Hinkley PointThe UK government last night revealed that it wants more time to consider plans to build an £18 billion nuclear power plant in south west England.

Its statement came unexpectedly and as a surprise to the board of French state-owned EDF which earlier voted narrowly to go-ahead with building Hinkley Point C.

A joint presentation by ministers and representatives of the company this morning was called off because of the government’s statement as attempts were being made to find out what had prompted it.

Theories ranged from a last minute change of mind on the back of cautionary warnings about its value-for-money, to a rethinking of the UK’s energy mix.

The project is being backed by the Chinese who were also baffled by the last minute intervention by the UK government. A delegation due to sign the deal is understood to have returned home.

It is thought the Prime Minister Theresa May intervened because of the growing number of questions over the project.

Sources claim that at a meeting with French President Francois Hollande last month, Mrs May was non-committal about the project and he has given her more time to consider the project.

A trade union official described her decision as “bonkers and bewildering”. Justin Bowden, the GMB union’s national secretary for energy said that delaying the project puts thousands of jobs at risk.

Business and Energy Secretary Greg Clark said that a final decision will be made in the early autumn.

EDF said it remained confident about the government’s commitment to build reactors at Hinkley Point. chief executive Jean-Bernard Levy said: “There is no comment to make. The statement made by Mr Clark is perfectly clear. I have no doubt about the support of the British government led by Mrs May.”

The delay was the latest twist in an already controversial saga. A director of EDF resigned before tonight’s meeting and it was understood that the remaining 17 members voted 10 to seven to go ahead with the project.

Gerard Magnin said the £18 billion project in Somerset is financially risky. He is the second member of the board to resign over the issue after chief financial officer Thomas Piquemal departed in March.

Mr Magnin was the only one of the board members with a background in alternative energy.

According to the Reuters news agency, Mr Magnin wrote to Mr Levy to say that at the time of his appointment he had expected a reorientation of EDF’s strategy towards renewable energies, but that instead its centre of gravity was moving more and more towards nuclear.

“As a board member proposed by the government shareholder, I no longer want to support a strategy that I do not agree with,” Magnin wrote.

He did not attend the meeting to decide whether to proceed with the Hinkley Point project which divides opinion. Some say it is badly needed to avoid an energy gap in Britain, while opponents say it is expensive and will contribute too little to overall energy needs – just 7%.

The French government, which controls 85% of EDF’s capital and sets its industrial strategy, argues the UK project will support the French nuclear industry over the next decade.

Critics say that other EDF projects are behind schedule and there is no guarantee the Hinkley will be built within the 10 year timeframe, therefore risking a power shortage in Britain. It also means buying power at expensive prices.

Mr Magnin said the Hinkley Point project was “very risky”, echoing the criticism of French unions which say the project is too big for EDF and jeopardises the survival of the company.

EDF has net debt of more than €37 billion and will issue €4 billion worth of new equity later this year in order to shore up its balance sheet.

If it goes ahead, Hinkley Point will be the first nuclear plant to be built for two decades.

 

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