Hinkley Point contract signed in private ceremony
Image credit: Reuters
The £18bn Hinkley Point C nuclear power plant has received the final go-ahead as parties involved signed a final deal during a private ceremony in London yesterday.
The UK Business Secretary Greg Clark, Jean-Bernard Levy, chairman of French energy firm EDF and a He Yu from China’s CGN signed the so-called contract for difference, which paves the way for the plant's construction.
"Signing the contract for difference for Hinkley Point C is a crucial moment in the UK's first new nuclear power station for a generation and follows new measures put in place by government to strengthen security and ownership," Clark said.
"Britain needs to upgrade its supplies of energy, and we have always been clear that nuclear power stations like Hinkley play an important part in ensuring our future low-carbon energy security."
The government had already approved the construction earlier this month after having requested extra time for evaluation after EDF approved the investment in July. The signing ceremony formally concludes the process and will allow the parties involved to proceed with the construction of the 7GW plant in Somerset which is believed to give work to thousands of people.
The project will be managed by the Low Carbon Contracts Company on behalf of the UK government. Once operational, Hinkley Point C will cover 7 per cent of UK electricity needs. The plant, with a 60-year life-span, will sell power for £92.50 per megawatt hour during the first 35 years of its operations. UK-based businesses will receive more than 60 per cent of the project’s contracts.
Unions welcomed the news, saying thousands of skilled jobs will now be created, benefiting firms across the UK.
"With collective sighs of relief all round, it is fantastic news that the Hinkley deal is finally signed and work can start on this vital piece of UK infrastructure," said Justin Bowden, the GMB union's national secretary for energy. "The formal go-ahead for Hinkley is the first serious sign that UK plc is open for business post-Brexit and holding a secret ceremony did not do justice to such an historic event. Attention must now straight away shift to Bradwell B and Sizewell C," he said, referring to further planned nuclear projects.
However, environmentalists didn’t share the excitement.
"With a stroke of the pen ministers are signing away billions of pounds of bill-payers' money to a project they know is plagued by legal, financial and technical problems," said Greenpeace UK executive director John Sauven.
"In the unlikely event Hinkley is working sometime in the second half of the next decade, renewable energy will be much cheaper, yet British consumers will still be forced to pay over the odds for nuclear power. It'll be the equivalent of being locked into an expensive fixed-rate mortgage as interest rates plummet."
Last month, some energy experts suggested the UK should focus on the development of the so-called small modular nuclear reactors instead of investing into massive projects the size of Hinkley Point. Small modular reactors (SMRs), each the size of a bus, would produce about a tenth of the electricity produced by Hinkley Point. The technology could be easily transported on trucks and barges and assembled within a year once it reaches its destination.
By combining more of such units, larger power plants could be created, providing heat and electricity for communities. According to a new report published yesterday, such reactors could be operational by 2030 if the UK government provides support to the technology.
The report, by the Energy Technologies Institute – a public-private partnership between the UK government and industry, states that the technology could help decarbonise the UK housing sector by serving not only as a source of electricity but heat as well.
"Our analysis shows that it is possible to have a first of a kind SMR operating by 2030 if SMR developers, SMR vendors, government and regulators work together in an integrated programme," said Mike Middleton, the ETI's nuclear strategy manager and report author.
"We have carried out further design and cost assessments, which reconfirm the attractiveness of deploying SMRs as CHP plants linked to district heating systems identifying further carbon savings and cost benefits."
The report says SMRs could deliver low-carbon heat into cities via hot water pipelines up to 30km in length, which increases the technology’s appeal in the battle to reduce greenhouse gas emissions.