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Hinkley Point C to go ahead after EDF board approves project Hinkley Point C to go ahead after EDF board approves project
(about 2 hours later)
Britain is set to get its first new nuclear power station for a generation after EDF’s directors voted in favour of building Hinkley Point C. Britain is set to get its first new nuclear power station for a generation after EDF’s directors voted to start building Hinkley Point C.
After a decade of debate about the controversial £18bn project, the EDF board approved the project by 10 votes to seven, according to reports in Paris. After a decade of debate about the controversial £18bn project, the board of EDF approved Hinkley Point C by just 10 votes to seven, according to sources close to the French energy company.
Related: Hinkley Point C timeline: all the key momentsRelated: Hinkley Point C timeline: all the key moments
The UK government, which has backed the project heavily, will welcome EDF’s commitment as a vote of confidence in the economy after the country voted to leave the EU in June. The UK government, which backed the project heavily when David Cameron was prime minister, will welcome EDF’s commitment as a vote of confidence in the economy after the country voted to leave the EU in June.
The construction of Hinkley Point C will create an estimated 25,000 jobs, with completion scheduled for 2025. It will provide 7% of Britain’s electricity, enough power for six million homes, for almost 60 years. However, Hinkley Point C could eventually cost British taxpayers almost £30bn in subsidies to EDF and its Chinese backer.
There was, however, another twist to the contentious project in the run-up to the meeting when an EDF director opposed to the project resigned. The government and EDF will now sign the contracts for Hinkley Point C, which is on the Somerset coast, although the formal documentation may not be completed until the autumn to allow Theresa May’s government to familiarise itself with the details of the project.
The construction of Hinkley Point C will eventually create an estimated 25,000 jobs, with completion scheduled for 2025. The two nuclear reactors at the plant will provide 7% of Britain’s electricity, enough power for six million homes.
EDF said in a statement: “Hinkley Point C is a unique asset for French and British industries as it will benefit the whole of the nuclear sectors in both countries and will support employment at major companies and smaller enterprises in the industry.”
There was another twist to the contentious project in the run-up to the meeting when an EDF director opposed to the nuclear plant resigned before the formal vote.
Related: Hinkley's nuclear plant fails all tests - bar the politics | Damian CarringtonRelated: Hinkley's nuclear plant fails all tests - bar the politics | Damian Carrington
Gérard Magnin said it was “very risky” in his resignation letter to EDF’s chief executive. Gérard Magnin said the project was “very risky” in his resignation letter to EDF’s chief executive.
Magnin did not attend the board meeting in Paris on Thursday where EDF’s remaining 17 directors voted. His resignation follows that of EDF’s chief financial official, Thomas Piquemal, earlier this year, which was also linked to concerns about the cost of Hinkley Point C.Magnin did not attend the board meeting in Paris on Thursday where EDF’s remaining 17 directors voted. His resignation follows that of EDF’s chief financial official, Thomas Piquemal, earlier this year, which was also linked to concerns about the cost of Hinkley Point C.
Their resignations and the narrow margin in the vote highlights the split created in the company by the project. Their resignations and the narrow margin in the vote highlights the divisions created by the project.
Related: Hinkley Point C: should the £18bn nuclear power station be built?Related: Hinkley Point C: should the £18bn nuclear power station be built?
John Sauven, the executive director of Greenpeace, called the project “terrible value for money” for British families but said it had become “too big to fail” for politicians. John Sauven, the executive director of Greenpeace, called Hinkley Point “terrible value for money” for British families but said it had become “too big to fail” for politicians. EDF is 85% owned by the French government.
“This deal was more riven with dissension in the EDF board than anyone expected. It’s unprecedented division and far closer than predicted.” he said. “Countless experts have warned that for British families this power station will be terrible value for money,” he said. “This is a bitter pill to swallow for hard up people who have been told that the government is trying to keep bills down while dealing with energy security and lowering carbon emissions.
“Countless experts have warned that for British families this power station will be terrible value for money. This is a bitter pill to swallow for hard up people who have been told that the government is trying to keep bills down while dealing with energy security and lowering carbon emissions. “Today’s decision doesn’t prove the UK is open for business post Brexit. It just shows the Hinkley deal became too big to fail in the eyes of British and French politicians.
“Today’s decision doesn’t prove the UK is open for business post Brexit. It just shows the Hinkley deal became too big to fail in the eyes of British and French politicians.” “Theresa May now has a chance to stop this radioactive white elephant in its tracks. She should look at the evidence and see that this deal would be a monumental disaster for taxpayers and bill payers.”
The National Audit Office (NAO) has warned taxpayers could end up paying more than £30bn through a range of subsidies designed to support the project. In a damning report, the NAO also said there could be potential liabilities for disposing of spent fuel and meeting claims in the event of a nuclear accident, meaning renewable energy sources may be a cheaper option.
The government has agreed a strike price - a guaranteed price for the electricity generated by Hinkley Point - of £92.50 per megawatt hour for 35 years. This is more than twice the cost of existing wholesale electricity prices.
But there is also concern in France about the cost of the project. EDF has net debt of more than €37bn (£31bn) and unions representing the company’s workers in France are concerned that Hinkley Point could jeopardise its survival.
The project will be part-funded by China after the China General Nuclear Power Corporation agreed to take a 33% stake in the project. Shareholders in EDF have also agreed to buy €4bn (£3.4bn) of new shares in the company to fund Hinkley Point C.
However, similar projects in Finland and Flamanville, France are years behind schedule and significantly overbudget. Areva, the French nuclear group that works with EDF, had to be rescued from bankruptcy by the French government because of the problems in the industry.
In his resignation letter, Magnin wrote: “Let’s hope that Hinkley Point will not drag EDF into the same abyss as Areva.”
Magnin has a background in alternative energies and is the founder of Energy Cities, an association designed to help local authorities move to newer forms of energy.
The French government proposed him as a board member in 2014, which was seen as an attempt to encourage the company to invest more in renewable energy.
However, Magnin said Hinkley Point and a proposal to buy Areva’s reactor building unit showed EDF was actually moving further towards nuclear power.
“As a board member proposed by the government shareholder, I no longer want to support a strategy that I do not agree with,” he wrote in the letter to EDF chairman Jean-Bernard Lévy.
However, business leaders in Britain welcome the announcement, saying that new investment in the country’s infrastructure is vital.
Josh Hardie, deputy director-general of the CBI, said: “The final green light for Hinkley Point is welcome news as now, more than ever, action is needed on key infrastructure projects which attract investment to the United Kingdom.
“The project represents a significant milestone in the United Kingdom’s energy future. It will play a key role in further securing and decarbonising our energy supply, putting us on the right path to a sustainable energy mix.
“We hope it will also help kick start a new nuclear build programme, creating jobs for tens of thousands of people – not just in the local community, but up and down the whole country.”
Hinkley Point has already been beset by delays due to concerns about the cost and safety. The government initially gave the green light for new nuclear power stations in Britain in 2006, claiming they would make a “significant contribution” to lowering carbon emissions as polluting coal power stations are phased out.
Vincent de Rivaz, the chief executive of EDF Energy, its British subsidiary, said in 2007 that the country would be cooking Christmas turkeys on new nuclear power by 2017.
Work could now be underway at Hinkley Point by next year. Approval for the project could encourage other foreign nuclear companies such as Toshiba in Japan to press ahead with their plans to build their own nuclear reactors.