EDF Go-Ahead for U.K. Nuclear Project but Government Wavers

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Doubts continue to hang over the future of the delayed £18 billion ($23.7 billion) Hinkley Point C nuclear project in the U.K. despite the Board of Directors at developer Électricité de France SA (EPA:EDF) (Paris, France) approving the final investment decision.

EDF stated: "At its meeting on 28 July 2016, EDF's Board of Directors made the final investment decision and gave the President the authorisation to ensure its full execution in the framework of the signature process of all the contracts and agreements necessary to build the two nuclear reactors at Hinkley Point C (HPC) in Somerset, in south-west England. Following this decision, the conditions have been met to allow EDF to sign the contracts with the British Government, EDF's historic partner China General Nuclear Power Generation (CGN) and the main suppliers of the project."

Despite the departure of one board member in protest against the U.K. project, EDF's Board narrowly voted 10-7 in favour of going ahead with Hinkley. However, hours later Greg Clark, U.K. business and energy secretary, announced that the government planned to review the project, creating more doubt and adding to the delays.

"The U.K. needs a reliable and secure energy supply and the government believes that nuclear energy is an important part of the mix," Clark said. "The government will now consider carefully all the component parts of this project and make its decision in the early autumn."

The 3,300 megawatt (MW) Hinkley project will be the first new nuclear build project in the U.K. in a quarter of a century and, on completion, will supply around 7% of the total electricity demand. It is meant to herald in a new era of nuclear power, with other projects waiting in the wings.

In the past six months the project has run into numerous obstacles, not least a series of internal disagreements at EDF. In the April, the company's chief financial officer, Thomas Piquemal, suddenly quit, claiming Hinkley would place too much financial stress on the company. In May, EDF delayed the final invest decision for the second time. For additional information, see May 2, 2016, 2016, article--EDF Delays Hinkley Point C Nuclear Decision until September.

The government's decision to review the project again was criticised by many in the industry.

Tom Greatrex, Chief Executive of the Nuclear Industry Association, said: "The Government's decision to take longer to look at the contract do not change the fundamentals -- that by 2030, two thirds of our electricity generation capacity will have retired, and we need to replace it with low carbon and reliable power for the future to improve our energy security and meet our commitments on carbon emissions targets. We now need the new ministers to quickly endorse the decision to show they are serious about industrial strategy, building new infrastructure by securing inward investment to create our low carbon energy supplies of the future." The U.K. government is in a state of upheaval following the country's decision to leave the European Union. Industrial Info recently reported on the possible negative impacts that decision will have on its power and energy sector. For additional information, see July 12, 2016, article -- U.K. Exit From EU Will Hit Energy Investment.

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