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Hinkley Point C nuclear power station gets government green light Hinkley Point C nuclear power station gets government go-ahead
(about 1 hour later)
Theresa May has given the Hinkley Point C nuclear power station the go-ahead, and announced “significant new safeguards” for future foreign investment in critical infrastructure. Theresa May has given the £18bn Hinkley Point C nuclear power station the go-ahead with “significant new safeguards” to make sure Chinese involvement does not threaten national security.
The move follows a pause of the announcement of the deal amid concerns on the part of the new prime minister about Chinese involvement in Britain’s nuclear industry. The controversial scheme in Somerset was approved six weeks after May unexpectedly placed the project under review, causing tensions with China.
The controversial £18bn scheme in Somerset, which has been criticised over costs as well as national security worries, will proceed following a “new agreement” with French company EDF, the government confirmed on Thursday. Under the deal, the major plant is to be built by EDF, the French state company, with £6bn investment from China, without any changes to the original price tag.
Hinkley would be the first new nuclear reactor built in Britain in two decades. The government is keeping a guaranteed price of £92.50 to EDF for every megawatt hour of electricity generated, despite concerns that is far higher than the market rate.
In a statement, the business secretary, Greg Clark, said Hinkley was approved but a new framework for foreign investment would come into force after that decision. That suggests China will be allowed to continue with its multibillion-pound passive investment in Hinkley Point. Greg Clark, the business secretary, is introducing some new security restrictions, including a ban on EDF being able to sell its interest without UK government approval.
But it suggests there could potentially be restrictions that come into force after that, stopping China investing more actively in developing plants at Sizewell in Suffolk and Bradwell in Essex. He is also bringing in a new national security test for all foreign investment in critical infrastructure, which could hamper China’s goal of developing its own plant at Bradwell in Essex and making a more active investment in Sizewell B in Suffolk.
As part of the changes, there will be changes 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. Beijing has not yet confirmed that it wants to proceed with the investment in Hinkley since the UK government implied there were security concerns about its involvement in the sector.
Chinese officials have previously reacted by giving a series of veiled warnings that a decision by Britain to halt their investment in UK nuclear would be seen as a snub and would put at risk a supposed golden era of relations between the two countries.
The decision means Hinkley will be the first new nuclear reactor built in Britain in two decades.
Ahead of an announcement in the House of Commons, Clark said: “Having thoroughly reviewed the proposal for Hinkley Point C, we will introduce a series of measures to enhance security and will ensure Hinkley cannot change hands without the government’s agreement. Consequently, we have decided to proceed with the first new nuclear power station for a generation.
“Britain needs to upgrade its supplies of energy, and we have always been clear that nuclear is an important part of ensuring our future low-carbon energy security.”
As part of the decision, there will be wider changes 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.
This marks a departure from the more laissez-faire approach of David Cameron’s administration.
A government statement said: “Following a comprehensive review of the Hinkley Point C project, and a revised agreement with EDF, the government has decided to proceed with the first new nuclear power station for a generation. However, ministers will impose a new legal framework for future foreign investment in Britain’s critical infrastructure, which will include nuclear energy and apply after Hinkley.”A government statement said: “Following a comprehensive review of the Hinkley Point C project, and a revised agreement with EDF, the government has decided to proceed with the first new nuclear power station for a generation. However, ministers will impose a new legal framework for future foreign investment in Britain’s critical infrastructure, which will include nuclear energy and apply after Hinkley.”
The deal had been due to be approved with a £6bn investment from China when May placed the project under review in July. It said the new legal framework for future foreign investment in critical infrastructure would mean the government would “take a special share in all future nuclear new build projects” so “significant stakes cannot be sold without the government’s knowledge or consent”.
Chinese officials reacted by giving a series of veiled warnings that a decision by Britain to halt their investment in UK nuclear would be seen as a snub and would put at risk a supposed golden era of relations between the two countries.
The government on Thursday said the revised agreement meant in principle that it would be able to “prevent the sale of EDF’s controlling stake prior to the completion of construction, without the prior notification and agreement of ministers”.
It said that “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 statement said the new legal framework for future foreign investment in “critical infrastructure” would mean the government would “take a special share in all future nuclear new build projects” so “significant stakes cannot be sold without the government’s knowledge or consent”.
It said there would be reforms to the 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” including a review of the public interest regime in the Enterprise Act 2002.
“The changes mean that, while the UK will remain one of the most open economies in the world, the public can be confident that foreign direct investment works in the country’s best interests,” it said.“The changes mean that, while the UK will remain one of the most open economies in the world, the public can be confident that foreign direct investment works in the country’s best interests,” it said.
Clark said: “Having thoroughly reviewed the proposal for Hinkley Point C, we will introduce a series of measures to enhance security and will ensure Hinkley cannot change hands without the government’s agreement. Consequently, we have decided to proceed with the first new nuclear power station for a generation. The news that the project was going ahead was met with dismay by environmental campaigners, who had been given hope it would be cancelled when May placed it under review.
“Britain needs to upgrade its supplies of energy, and we have always been clear that nuclear is an important part of ensuring our future low-carbon energy security.” John Sauven, Greenpeace’s executive director, said the potential political embarrassment of scrapping the deal must have proved too great.
The government is keeping a guaranteed price of £92.50 to EDF for every megawatt hour of electricity generated, despite concerns that is far higher than the market rate. But he added: “This decision is unlikely to be the grand finale to this summer’s political soap opera. There are still huge outstanding financial, legal and technical obstacles that can’t be brushed under the carpet. There might be months or even years of wrangling over these issues. That’s why the government should start supporting renewable power that can come online quickly for a competitive price.”
Caroline Lucas, co-leader of the Green Party, said it was absurd and disappointing that the deal was to proceed when the government is reducing support for cheaper, safer and more reliable renewable alternatives.
“Instead of investing in this eye-wateringly expensive white elephant, the government should be doing all it can to support offshore wind, energy efficiency and innovative new technologies, such as energy storage,” she said.
However, business groups, engineers and trade unions welcomed the decision to proceed, saying it would create jobs and ensure a secure supply of energy.
Claire Jakobsson, of the EEF manufacturers’ organisation, it was a “relief to see Hinkley proceeding after months of delays and uncertainty” but called for significant reductions in the price of electricity generated by future nuclear projects.
Brian Rye, acting general secretary of UCATT, the construction union, said: “The go-ahead was vital for the construction industry which desperately needed the confirmation of such a major project following a slowdown in the industry caused by the Brexit vote. It is also good news for the overall economy as it helps to guarantee the stability of our future energy supply.”