Key contract signed for Hinkley Point

The government and EDF have signed the contract for the new £18Bn Hinkley Point C nuclear power station.

The key contract has been signed by the government and French energy giant EDF, for the UK’s first new nuclear power point in a generation, Hinkley Point C.

Following Theresa May’s appointment to Prime Minister, she made an unexpected announcement in July that she wanted to scrutinise the project.

Her government gave its approval two weeks ago on condition that it could prevent EDF from selling its controlling stake before completion of the project.

CGN will pay about a third of the cost of Hinkley. Under its agreement with EDF, it will also have a stake in a new plant at Sizewell in Suffolk.

The Chinese will then be allowed to develop their own reactor technology at Bradwell in Essex, subject to planning and regulatory approvals.

In a ceremony in London on Thursday, EDF boss Jean-Bernard Levy joined officials from the UK, France and China, for the official signing following the governments go-ahead for the plant earlier this month.

Business Secretary Greg Clark, Foreign French Minister Jean-Marc Ayrault, China’s National Energy Administration Director, Nur Bekri, and the Chairman of Chinese firm CGN were amongst those attending the meeting.

Ahead of the event, dozens of contracts consisting of thousands of pages for the huge project in Somerset are believed to have been prepared ahead of the event, with the key document being the Contract for Difference or CfD, which gives a guaranteed price for the electricity Hinkley Point will generate for 35 years.

Mr Clark said that signing the contract was a “crucial moment” and that Hinkley played “an important part in ensuring our future low-carbon energy security”.

He Yu said it signifies “CGN’s commitment to the UK as one of the world’s leading developers and operators of nuclear power. This flagship programme is a triple win for China, Britain, and France and is a culmination of years of cooperation between the three countries. CGN looks forward to providing UK consumers with safe, reliable and sustainable energy and maximising opportunities for UK suppliers and the UK workforce.”

The nuclear power plant will provide power for nearly six million homes.

Critics say the guaranteed “strike price” – which is more than twice the current wholesale cost of electricity – will provide a windfall for EDF for decades to come.

However, Greenpeace said it was “no wonder the UK government has opted for a ‘champagne-free’ signing ceremony away from public view.

“With a stroke of the pen ministers are signing away billions of pounds of billpayers’ money to a project they know is plagued by legal, financial and technical problems. In the unlikely event Hinkley is working some time 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 like being locked into an expensive fixed-rate mortgage as interest rates plummet.”

 

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