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May gives go-ahead to Hinkley Point with new conditions

Hinkley power stationTheresa May has given the go-ahead to start building the £18 billion Hinkley Point nuclear plant after securing a number of new conditions from the French company EDF.

The decision was originally approved in July but after her elevation to Number 10 Mrs May announced that she wanted to review the project over concerns about the costs and the degree of Chinese involvement.

China is providing a third of the capital for the project which has been criticised for locking Britain into high energy costs. There have also been resignations from the board of EDF over the costs involved.

A UK government statement this morning said: “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.

“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.”

Key points to the new deal:

  • The government can stop EDF from selling its stake in Hinkley Point before it’s finished building.
  • After Hinkley, the government will take a special share in all new nuclear plants.
  • Full implications of foreign ownership of power stations will be scrutinised for the purposes of national security.
  • The government will ensure foreign direct investment works in the country’s best interests.

    David Elmes, head of the global energy research network at Warwick Business School and with 20 years of experience working in the energy and management consulting industries, said: “This is what being painted into a corner feels like,” adding that it “locks UK bill payers into an expensive source of energy for decades to come.”

    He said: “The UK’s climate change commitments make it tough to provide electricity reliably at low emissions, but this deal was started a decade ago when we hoped the companies involved could deliver it on time and at a reasonable cost.  The price UK bill payers are committing to through the government is now double and the start date has slipped at least eight years.

    “The choices the UK has for the supply and use of energy have changed considerably since this deal was first conceived.  

    “The ability of governments, companies and financiers to commit to such huge projects has also faded. While those involved will be hugely relieved; we need a serious discussion of cost effective opportunities that offer as much or a greater contribution to the UK economy so we’re not boxed in to such a decision again.”

    Josh Hardie, CBI deputy director-general, said: “The final green light for Hinkley Point is good news for the UK’s energy future as well as supporting jobs and growth across the South West and the country.

    “New nuclear energy will play an important role in supporting a diverse, low-carbon and secure energy supply, so it’s now time to push on with this key project.

    “Investors are hungry for further signs from the Government that the UK is open for business. Pressing ahead with major infrastructure decisions – such as giving clarity to around the next Contracts for Difference auction and the post-2020 Levy Control Framework, and expanding runway capacity in the South East – would give a real boost to their confidence in the UK in the long-run.”

    Ian Maclean, UK managing director for energy & industry at WSP | Parsons Brinckerhoff said:

    “This is the good news we’ve all been waiting for. After years of delays we can now look positively to the future, prepare our business and recruitment plans accordingly, and start filling the growing gap in our energy mix.

    “However, this is just the beginning. We now need to start delivering not just on this one project but also other major nuclear projects (both big and small modular reactors) that are yet to get off the ground.

    “Whilst this is a huge step forward in decarbonising our energy supply, we shouldn’t ignore the widespread public demand for renewables, as recent polls have suggested.

    “Hopefully, this is a sign that the Government intends to create a business climate that will encourage investors and developers alike to forge ahead with a new fleet of power plant that includes a mix of both renewable energy and nuclear power, as well as gas-fired power plants to provide cleaner and safer energy to UK plc.”

     



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