29.09.2016_No54 / News

Go-Ahead For Hinkley Point As Key Contractual Documents Are Signed In London

29 Sep (NucNet): Government ministers and officials from the UK, France and China have attended a signing ceremony giving the final go-ahead for Hinkley Point C – the first new nuclear power station to be built in the UK for a generation.

A computer generated image of Hinkley Point C. Courtesy EDF.

During the ceremony in London, the secretary of state for business, energy and industrial strategy, Greg Clark, the chairman and chief executive officer of EDF, Jean-Bernard Levy and the chairman of China General Nuclear Company (CGN), He Yu signed the final documentation to enable the two EPR units at Hinkley Point C in southwest England to go ahead.

This follows the government’s decision earlier this month to proceed with the £18bn (€21bn, $23bn) project following a review and revised agreement with France’s mostly state-owned EDF.

Two key contracts – the contract for difference and the investor agreement – were signed today, the government said in a statement. The signing represented “a significant step forward for a new era of nuclear power in the UK”.

Mr Clark said signing the contract for difference was “a crucial moment” in the UK’s first new nuclear power station for a generation and follows new measures put in place by the government to strengthen security and ownership.

He 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.”

Unions welcomed the development, saying thousands of skilled jobs would now be created, benefiting firms across the UK. It is expected to produce 7GW of electricity when fully operational, enough to power six millionhomes and provide 7% of Britain’s electricity needs for 60 years.

The government published documents detailing the contractual obligations it has entered into, including a “value for money assessment” that allowed ministers to make the decision to proceed with the project. According to the documents, UK-based businesses will benefit from more than 60% of the cost of the project and 26,000 jobs and apprenticeships will be created during construction and after its opening.

The government announced on 15 September that it would proceed with Hinkley Point C following a review of the project initiated by incoming prime minister Theresa May. The government said ministers would impose a new legal framework for future foreign investment in UK’s critical infrastructure, which will include nuclear energy and apply after Hinkley.

A statement at the time said the framework includes rules for future foreign investment in UK critical infrastructure which mean that 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.

The Office for Nuclear Regulation will be directed to require notice from developers or operators of nuclear sites of any change of ownership or part-ownership. This will allow the government to advise or direct the ONR to take action to “protect national security as a result of a change in ownership”.

There will be 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, the statement said.

Existing legal powers and the new legal framework will mean that the government is able to intervene in the sale of EDF’s stake once Hinkley is operational.

The deal to build the station had been due to be approved with a £6bn investment from China before incoming Mrs May placed the project under review in July 2016.

China’s CGN, the investor in Hinkley Point C, is also aiming to take a share in the construction of two EPR units at Sizewell in Sussex and a Chinese Hualong One reactor Bradwell in Essex. Initial agreements for both projects were signed with EDF last year. Those agreements say CGN would have a 20% stake in Sizewell and a 66.5% stake in Bradwell.

The key contractual documents are online: http://bit.ly/2dcGKOb

Related reports in the NucNet database (available to subscribers):




David Dalton

© NucNet a.s.b.l Brussels, Belgium