Government gives go ahead to £18bn nuclear power station at Hinkley Point C

The government has given the go ahead for the new nuclear power station at Hinkley Point after imposing “significant new safeguards” on foreign investment for future projects.

The £18bn plant in Somerset is being financed by the French and the Chinese and as part of the deal, China wanted to use its design for new UK nuclear stations. Today, however, the government said it would “impose a new legal framework for future foreign investment in Britain's critical infrastructure”.

Theresa May announced last month that the government was reviewing the Hinkley project amidst concerns over costs and the implications of nuclear power plants being built in the UK by foreign governments. France’s EDF is funding two-thirds of the project, with China investing the remaining £6bn.

The Chinese had agreed to take a stake in Hinkley and at Sizewell in Suffolk on the proviso that the UK government would approve a Chinese-led and designed project at Bradwell in Essex. Announcing the go ahead today, the government said: “After Hinkley, the British 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.”

"After Hinkley, the British government will take a special share in all future nuclear new build projects to ensure that significant stakes cannot be sold without the government's knowledge or consent."
UK government statement

The statement promised 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.”

Energy secretary Greg Clark said that he thought it was right that the government had reviewed the Hinkley deal in detail. “What we have decided is that for critical infrastructure generally we want to make sure our powers in this country are comparable to those of others, to be able to check that national security considerations are taken into account.” Clark said that the government will require EDF to guarantee that they won't dispose of their stake in Hinkley “without the government’s consent unless and until the plant is built”. He also said that all future nuclear power plants will be subject to the same regime.

The infrastructure sector welcomed the news that Hinkley will go ahead and the estimated 25,000 jobs that will be created by the project. "Whilst we acknowledge the political sensitivity, the engineering and wider industry is pleased to see that Greg Clark has confirmed the decision to proceed with the Hinkley Point C nuclear power station," said Dr Nelson Ogunshakin, chief executive of the Association for Consultancy and Engineering. "The industry is now able to begin the necessary planning to allocate resources, manpower, and to deliver the project. Giving the project the go ahead will also demonstrate to the world that the UK is open for business, as a significant and reliable market for investment going forward into the country's future outside the EU," said Ogunshakin.

"The UK requires new power generation as a matter of urgency, as demand grows and existing generating capacity is decommissioned," Ogunshakin said. "While the approval of Hinkley is a good step forward, we must not be complacent. ACE continues to urge the government to drive forward plans for the new gas-fired power stations, investment in new solar and wind capacity, and development of the energy storage facilities, all of which are needed in the short term to ensure demand is met and the UK does not fall behind its global competitors," he said.

Ian Maclean, UK managing director for energy and 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 recognising that giving Hinkley the green light was a huge step forward in decarbonising the nation’s energy supply, Maclean was keen to stress the need to take on board the widespread public demand for renewables, as suggested by recent opinion polls. “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,” said Maclean.

Dr Uwe Krueger, Atkins’ chief executive officer, said: “Today’s green light is a very positive step for the nuclear industry in the UK as a whole and an encouraging signal of commitment from the government to building crucial energy infrastructure in this country. Nuclear power is an important part of our energy mix and has a major role to play in the transition to a low-carbon future. We are looking forward to continuing our 30 year-long relationship with EDF Energy during the construction and operational life of Hinkley Point C.” 

Kier Group, who in joint venture with BAM Nuttall has been undertaking site preparation works at Hinkley Point since 2012 and currently has approximately 350 employees working on the project, also welcomed the announcement. Kier Group chief executive, Haydn Mursell said: “Today’s decision marks a major step in the UK’s nuclear renaissance and reflects the country’s commitment to a balanced energy strategy including low carbon energy sources.  Kier has excellent and proven capabilities in the nuclear industry and we look forward to working with EDF on the pipeline of opportunities that will arise from this project and on further energy projects in the UK in due course.”

Nick Baveystock, Institution of Civil Engineers director general, said: “The prime minister’s decision to approve the project is a major step forward for the future of UK energy security. The decision comes at critical time, demonstrating confidence in the infrastructure sector and in the UK as a place to invest. Nuclear is part of a combined approach to the UK’s energy mix and must form part of coherent energy policy.”

EDF warmly welcomed the government’s decision to proceed with Hinkley. EDF CEO and chairman Jean-Bernard Lévy said: “The decision of the British government to approve the construction of Hinkley Point C 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. This decision demonstrates confidence in the EPR (European Pressurised Water Reactors) technology and in the world renowned expertise of the French nuclear industry.”

"The government must not stop here. It is time to get the shovels out for a third runway at Heathrow, high-speed rail and new affordable homes."
TUC general secretary, Frances O'Grady

The TUC also welcomed today’s news. General secretary Frances O’Grady said: “We are pleased ministers have ended the uncertainty over Hinkley Point. This project will create thousands of quality jobs and apprenticeships and bring much-needed investment to the South West.” 

O’Grady also urged the government to give the green light to other infrastructure spending. “The government must not stop here,” she said. “It is time to get the shovels out for a third runway at Heathrow, high-speed rail and new affordable homes. Now is the time for the government to make the infrastructure investments our economy desperately needs,” O’Grady said.

Despite criticism from a number of quarters, including the Labour opposition, that the cost of electricity at Hinkley was far too high, the government has not decided to change the guaranteed ‘strike price’ of £92.50 per megawatt hour for electricity generated. Labour had previously criticised the price as way too high and had called for it to be renegotiated. “The government should - and could - have negotiated a lower strike price for Hinkley Point power,” said the shadow energy minister Barry Gardiner.

Once completed, the Hinkley Point C station will provide enough electricity to power six million homes throughout the UK.

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