Hinkley Point C will be one of the most expensive energy projects ever built in the UK

Hinkley Point: EDF agrees but 'bonkers' government hesitates

EDF, the French energy giant, has finally agreed to fund and build Hinkley Point C nuclear power station after months of deliberation, but the UK government has forced a last-minute halt to proceedings by saying it will now not make its final decision over support for the project until the autumn.

Hinkley Point has faced significant opposition from within EDF’s own board which only voted by a margin of 10 votes to seven in favour and with one member quitting in protest yesterday immediately before the meeting.

Environmental organisations such as Greenpeace have also protested against the site in recent weeks, calling for the £18bn project to be scrapped due to its high cost and potential risk to the environment.

"Theresa May now has a chance to stop this radioactive white elephant in its tracks,” said Greenpeace’s executive director John Sauven, after the government announced it would delay its decision.

“She should look at the evidence and see that this deal would be a monumental disaster for taxpayers and bill payers. The UK needs to invest in safe, reliable, renewable power,” he continued.

“The government should be embracing new innovative technologies that are powering Northern European countries already and coming down in price every year. We don't want to be left behind and locked into an old fashioned nuclear power plant that isn't working anywhere in the world and isn't fit for the 21st century."

However, the GMB union has warned that thousands of jobs are being put at risk by the government’s "bewildering" decision to pull back from signing the deal to build the first new nuclear power station in the UK for a generation.

Around 25,000 jobs will be created by the project, which is already years behind schedule.

Justin Bowden, the GMB union's national secretary for energy, said: "Theresa May's decision to review the go-ahead on HPC is bewildering and bonkers. After years of procrastination, what is required is decisive action not dithering and more delay.

"This unnecessary hesitation is putting finance for the project in doubt and 25,000 new jobs at risk immediately after Brexit. It is a gross error of judgment and must be reversed.

"Building Hinkley will not on its own make up for successive governments' failure to have in place a coherent energy policy, but it is a very important step along that road and, as GMB has been warning now for months, the country's energy capacity is already so fragile that if we have a cold winter there is a high likelihood we will experience power cuts.

"The ramifications of this foolish delay are far wider than putting our energy needs in jeopardy. They will immediately call into question other major infrastructure projects coming down the line like HS2 and Heathrow/Gatwick expansion."

There has been speculation that Prime Minister Theresa May was involved in the move to allow time to study the details of the project before any deal is signed and sealed.

Critics believe the government is concerned by the high cost of the project, which will see EDF receiving £92.50 per unit of electricity generated for the next 30 years - a higher price than the average.

Business and energy secretary Greg Clark said: "The UK needs a reliable and secure energy supply and the government believes that nuclear energy is an important part of the mix.

"The government will now consider carefully all the component parts of this project and make its decision in the early autumn."

EDF's chief executive, Vincent de Rivaz, was expected in Somerset on Friday morning alongside senior company officials to give interviews about the project.

Following the government statement, it emerged that no interviews would take place.

Officials from China General Nuclear (CGN), which has a stake of a third in the Hinkley project, had also been expected to attend an event. 

A statement said: "We respect the new government's need to familiarise itself with a project as important to the UK's future energy security as Hinkley Point C and we stand ready to help the government in this respect.

"CGN remains committed to delivering this much-needed nuclear capacity with our strategic partners, EDF, and providing the UK with safe, reliable and sustainable energy."

Shadow energy secretary Barry Gardiner claimed May could have delayed the project because of the recent financial involvement of the Chinese.

He said the government was right to review the terms of the deal and should seek to ensure better value for the taxpayer, rather than scrapping it altogether. EDF could not afford to quit the project if the UK put forward new terms, he added.

"The French government is far too committed to this project,” he told the BBC Radio 4 Today programme.

"The Chinese have come in for a third of the cost - that is another thing the government must review in the project. I believe Theresa May has probably pulled it back because of that very involvement."

While these facts have been apparent to the government for some time, it may have been holding off on the announcement that it intended to delay its decision as it thought EDF might reject the project anyway due to dissension amongst its board members.

In addition, government advisor and senior research fellow at University College London Paul Dorfman said it was ‘extremely unlikely’ that EDF would continue with its plans following the UK’s decision to leave the European Union at the end of June. 

“The decision has been pending for several years and is seen as key to the renewal of the UK’s power infrastructure,” said Jonathan Robinson, principal energy consultant with market researchers Frost & Sullivan.

“When completed, it will supply seven per cent of the UK’s electricity, vital given the closure of all the UK’s coal plants by 2025 and the closure of nuclear plants in the 2020s and 2030s.

“What had not been anticipated by EDF was that the UK government would immediately announce a review of the project, with a decision to be delivered in September.

“The reason for this action is the on-going contentious issue of the cost of the project, projections for which have continued to rise, and which mean that UK taxpayers will in effect be subsidising a project that assumes energy costs will be more than double what they are now when it is operational.

“The recent decline in wholesale gas costs coupled with the continued decline [of costs] in renewables, particularly solar, have made new nuclear projects harder to justify. EDF has progressed slowly and the cost benefit position has gradually weakened.

“The change in government does give the UK a way out if it wants to abandon this deal, but after cutting renewable subsidies and mandating coal closures, it has limited options other than a renewable u-turn or massive investment in gas, which does have security of supply implications.

“Even if the project is approved in September, the length of time it will take to come online will be a key issue, given the capacity gap that is looming in the UK. This approval does not mean the immediate start to construction and further delays are almost inevitable.

“Comparable nuclear projects in France and Finland have had massive cost and time overruns. Finland’s Olkiluoto is now running nine years late and will take 15 years in total to construct. On this basis, even if Hinkley is started now it will not be online until the 2030s.

“One possible solution could be that the UK government pushes for a renegotiation of the deal, but this could potentially mean the withdrawal of EDF from the project. The stakes for UK-French relations and the UK’s future energy policy are very high indeed.”

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