UK Approves Hinkley Point C Nuclear Deal

The UK government approved the EDF-China Hinkley Point C nuclear plant deal September 15, with some changes to the contract but not the controversially high guaranteed offtake price of £92.50/MWh. However that price is only set if the consortium building the plant completes it on time; if not, it will be less, finance minister Philip Hammond told a parliamentary committee last week.

The government will be able to block the sale of the French stake, once an exchange of letters between the government and EDF has been made. A new legal framework for future foreign investment in British critical infrastructure will mean that after Hinkley, the government will take a special share in all future nuclear new build projects. This will ensure that significant stakes cannot be sold without the government’s knowledge or consent.

In a statement, the Secretary of State for Business, Energy and Industrial Strategy Greg Clark said the proposal for Hinkley Point C had been "thoroughly reviewed."  

Artist's impression of Hinkley Point C (Credit: EDF)

He added that Britain needs to upgrade its supplies of energy, including low-carbon sources. He also said the collaboration between France and the UK underlines the continued strength of the bilateral relationship and the ongoing industrial and energy co-operation.

Welcoming the decision, the business lobby group CBI said: “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 southeast – would give a real boost to their confidence in the UK in the long-run.”

Although EDF has given the final investment decision, it was not an easy decision: the majority was narrow and one of the board members quit. Finance chief Thomas Piquemal had already left in the spring, worrying that the financial strain would prove too great.

The technology that will be used is untested and the two ongoing projects in France and Finland are already delayed by years and billions over budget. Recent tests on key components on the prototype French Flamanville plant, now being built, suggest the further delays are still possible. 

William Powell