British Government Puts Brakes on UK's First New Nuclear Power Plant in 20 Years

Recent tumult in British politics hasn't helped the troubled Hinkley Point C project, with the government now calling for a review.

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Jul 29 2016, 10:40am

The site of Hinkley Point. Image: jgolby/Shutterstock

After years of tussling, French energy company EDF this week finally agreed to fund and build Britain's next nuclear power plant—but rather than sign the contracts, the British government has further delayed the process by ordering a review of the project.

If built, Hinkley Point C in Somerset would be the first new nuclear plant in the UK since 1995, but the £18 billion ($24 billion) project has been delayed by debate around its high costs and a series of high-profile resignations—the latest from EDF board member Gerard Magnin, who warned yesterday that Hinkley could drag EDF into a financial "abyss" as he stepped down before a board vote on the project.

Despite Magnin's protest resignation, the EDF board voted in favour of the project on Thursday, and leaders of the company were expected to spend Friday in Somerset exchanging contracts with the British government. Instead, business secretary Greg Clark announced a surprise review would postpone the government's decision until early autumn, and now, as the BBC reports, EDF staff will spend the day taking down the party tents at Hinkley Point rather than welcoming VIP guests.

"In [David] Cameron and [George] Osborne, the French government had willing partners who they felt they could count on... Both are now not there"

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

Why the delay? A myriad of concerns have plagued the project, but the biggest is cost. Magnin called the project "very risky," and warned EDF could end up like Areva, the reactor builder that the company rescued from bankruptcy earlier this year. "Let's hope that Hinkley Point will not drag EDF into the same abyss as Areva," he said. Alongside Magnin and CFO Thomas Piquemal, who stepped down in March, local unions also believe the project could bankrupt EDF, which is 85 percent owned by the French government.

But this latest delay is likely down to the recent changes in the UK government. This project was backed by former chancellor George Osborne—who's now warming the back benches. New chancellor Philip Hammond said two weeks ago that "We have to make sure the project goes ahead," but as noted by Tony Roulstone, a professor setting up the University of Cambridge's new MPhil in nuclear energy, the change in government may have consequences.

"In [David] Cameron and Osborne, the French government had willing partners who they felt they could count on," he said, speaking to me before the government's announcement. "Both are now not there, and although initially the chancellor said it's very important, [the French] are worried because the cabinet is made up of all sorts of fierce people and they may have different views."

"They'd prefer to deal with the problems they've got and carry on"

Further delays could come if a UK general election is called, and such wariness could already be causing serious knock-on troubles for Hinkley. "The build will need to demonstrate high levels of professionalism as there will be enormous levels of scrutiny," Martin Freer, head of physics at the University of Birmingham, told me. "It will need the government to remain committed to nuclear energy for the long term, irrespective of the party in power. A change in direction of government policy midway through the project would signal the death of not only this project, but investment from international sources in major UK infrastructure projects. This would return the UK to the point that such projects would need to be funded entirely from the public purse with the associated tax burden."

Plus, delays or cancellation will be problematic for EDF's purchase of Areva, as it will leave the nuclear reactor builder with nothing to do. "They'd prefer to deal with the problems they've got and carry on," said Roulstone. "They need some projects. You can't have an organisation on your books like Areva and have nothing for them to do."

Closer to home, if Hinkley Point C isn't built, or is significantly delayed, it could leave the UK short on power. The new station will provide seven percent of British power when it comes online, which is hoped to be in 2025, just as older nuclear plants are decommissioned and coal plants are shut down under government environmental plans.

But if it is built, UK citizens will all be paying a premium to get power from Hinkley, as the government promised the French and Chinese funders a minimum price per kilowatt hour of electricity of £92.50 ($122), more than double current prices (this week, the index price fluctuated between £41 and £48, according to energybrokers.co.uk).

Alongside financial concerns, Hinkley Point uses a similar design to another EDF project in Flamanville, France, which has been delayed by its massive scale and safety issues with its steel. Such issues should be dealt with before Hinkley's construction starts, but it highlights the complications of building the European Pressurised Reactor (EPR) style of nuclear plant that EDF favours. Plus, environmentalists dispute whether nuclear is the right choice.

John Sauven, executive director of Greenpeace, told the Guardian we should be investing in renewables like offshore wind, which would be cheaper than Hinkley—though academics at the University of Bristol said it could make a "significant contribution to the fight against climate change" by allowing the closure of coal stations.

With so much disagreement, it's no wonder Hinkley Point C continues to be delayed.