George Osborne has said the new agreement over the Hinkley nuclear plant is “pretty much” unchanged from a deal struck when he was chancellor. The government announced that it will take a “special share” in critical infrastructure projects to stop investors selling before completion. But Mr Osborne told the BBC’s Today programme: “It looks to me pretty much the same deal.” He said he rejected a special share option during original negotiations. Mr Osborne said he had sought advice from security experts and civil servants in energy who said it “would not add more protection” because the nuclear industry was already so heavily regulated. He was responding to comments from Ed Davey, the Liberal Democrat MP and former energy secretary in the coalition government, who in 2013 granted planning permission for the £18bn nuclear power plant to be built at Hinkley Point in Somerset. France’s EDF is investing £12bn in the project and China is funding the remaining £6bn.
BBC 16th Sept 2016 read more »
Moody’s Investors Service (Moody’s) has today placed on review for downgrade the A2 senior unsecured ratings of Électricité de France (EDF) and the Baa2 ratings of its perpetual junior subordinated notes. Concurrently, Moody’s has placed on review for downgrade the group’s Prime-1 short-term ratings. Moody’s has also placed on review for downgrade the Baa2 long-term issuer rating of EDF’s subsidiary EDF Trading Limited (EDFT) and the Baa3 issuer and senior unsecured ratings of EDF’s subsidiary Edison S.p.A. (Edison), which incorporate support from their ultimate parent. A full list of affected ratings is provided towards the end of this press release. Today’s rating action was prompted by the confirmation by the UK government on 15 September 2016 of the Hinkley Point C (HPC) new nuclear project following an agreement in principle with EDF. This paves the way for EDF to commit formally and irrevocably to the project, which was already approved by the company’s Board of Directors in July 2016.
Moody’s 16th Sept 2016 read more »
Hinkley Point is a reminder that nuclear projects hinge on hard-to-predict outcomes. Throwing subsidies at energy technologies has always been a treacherous business – and never more so than when it involves atomic fission. Since the first civil reactors 60 years ago, the nuclear industry has too often been a money pit for Napoleonic national missions, generally based on implausible long-term bets. That is why it is so hard to welcome Britain’s long-awaited “nuclear renaissance”. After a brief review by Theresa May’s incoming government, the country is poised to proceed with a heavily subsidised £18bn project to build a new power station at Hinkley Point – supposedly the first of a series to be constructed in coming years. Ministers may publicly vaunt this new generation of reactors as providing affordable power and security of output. But the history of UK nuclear programmes tells a cautionary tale. It is not simply the sobering memory of Britain’s last big atomic push in the 1960s, which commissioned most of the present ageing reactor fleet based on a uniquely duff design. Nuclear projects hinge on hard-to-forecast outcomes; notably their cost of construction and decommissioning over a 50-year life cycle. But like other power projects they are also sensitive to changes in fuel prices and the economics of rival technologies. What the UK needs now is a retreat from collectivist thinking, before too many more subsidy contracts are built into the system. Utilities should be building cheap gas capacity, while working out how to get cheap and reliable low emission power. Mrs May’s first review should not be her last.
FT 16th Sept 2016 read more »
The delay failed to deliver any significant amendment to the commercial terms of the deal or to Hinkley’s future ownership structure. But it allowed Theresa May and her team time to think about how they want future mergers and acquisitions by overseas buyers to work. One conclusion: new rules will govern foreign investment in critical infrastructure and the British government will hold a “golden share” in all future nuclear power projects. This is an ownership stake that in effect gives its holder control of at least 51 per cent of the voting rights and the attractions to government are obvious. Voters viscerally prefer the idea of household names remaining, at least partly, nationally owned. Golden shares could prove a particularly significant impediment to attracting investment in the UK’s nuclear infrastructure, where the upfront costs are huge and the long-term financial benefits uncertain. Hinkley is going ahead in part because EDF desperately needs to prove its nuclear technology is exportable but mainly because of the ludicrously generous terms which it offers to investors. Price a deal more realistically, while adding in a government golden share, and the likelihood of attracting ravening buyers is much reduced.
FT 17th Sept 2016 read more »
Green campaigners say anyone who objects to the Hinkley Point C nuclear power station project should dump EDF as their domestic power supplier. Long time Stop Hinkley campaigner and Green Party candidate for Somerton and Frome Theo Simon said that the decision to go ahead flew in the face of public opinion. “We really hoped we could move on,” he said. “All the arguments had been made, and the financial sector and the energy sector all said it was a bad idea.
Somerset Live 15th Sept 2016 read more »
Letter Prof Steve Thomas: The government’s go-ahead for Hinkley Point C seems to be driven by a belief that the commercial and diplomatic consequences of withdrawing now are too high. All the announcement amounts to is a decision that the government would take a “golden share” in major infrastructure projects, including nuclear power plants, after Hinkley. Golden shares vary from application to application but their main provision is the right for the government to veto changes in ownership of the company. The government claims it can already do this for Hinkley without a golden share, raising the question of why are they needed? Golden shares were widely used in the privatisations of the 1980s and 1990s but were ineffective and soon surrendered. Golden shares will do nothing to deal with reported concerns about Chinese industrial espionage or secret off-switches in the reactors. The Hinkley deal is desperately unpopular even among nuclear advocates because of its high price, but this review failed to address this. Construction of Hinkley is not expected to start until 2019, but there are several major hurdles to be cleared before then so this latest announcement may be yet another false dawn for Britain’s nuclear programme.
Times 17th Sept 2016 read more »
Lord Howell: Your leader (Sep 16) warning about the potential risks and heavy costs of proceeding with Hinkley is correct, although the costs of cancelling the project, not least in damage to Chinese relations as well as compensation and general disappointment, would also have been considerable. Such was the appalling dilemma with which the new government found itself confronted. It is also worth remembering that, apart from Hinkley, the UK already has a well-balanced and well-timed new nuclear programme in the pipeline, with reactors based on well-proven technology, possibly quicker to build and therefore in less need of colossal subsidy through high price guarantees for decades. These will be at Wylfa in north Wales and at Moorside, Cumbria, with Oldbury, Sizewell C and, now, Bradwell also in prospect. Meanwhile, because of much cheaper oil and plentiful gas (which are likely to persist), the real need to get us safely through the 2020s transition is for plenty of new combined-cycle turbines, helping to lower emissions, back up renewables, contain energy costs and increase system reliability and security. Whether the Hinkley giant will help or hinder this pathway towards a better, more competitive and cleaner UK energy balance over the coming decades remains an open question.
Times 17th Sept 2016 read more »
Letter Baroness Moulsecoombe (Green Party): I find it surprising that, only a few months after Britain voted to “take back control”, the Government has handed over a large chunk of future energy production to a French state-owned company with Chinese backers. The Hinkley decision comes at a time when changes in government policy have decimated the renewable energy sector. There are plenty of modern solutions to our energy needs which remain largely neglected, such as home and grid-scale batteries that store and release excess renewable power. Our post-Brexit aims should include creating a more self-reliant economy. Hinkley does the opposite.
Telegraph 16th Sept 2016 read more »
Hinkley is a huge gamble for France. The British government’s long-awaited green light for the Hinkley Point nuclear power station in England on Thursday is of vital importance to France and its state-backed energy industry. French nuclear power giant EDF is piloting the £18 billion (21 billion euro, $24 billion) project with investment from China. Here are the stakes for France: Nuclear power key to French economy Nuclear power is crucial to the French economy, and state-controlled French power company EDF will be relieved that the project has finally got the go-ahead. EDF, which is nearly 37 billion euros ($41.5 billion) in debt, hopes it will lead other European countries to rethink their nuclear strategy — and green-light projects for which it can provide the technology.
Yahoo 15th Sept 2016 read more »
General Electric Co (GE.N) said it will receive $1.9 billion for a contract to supply steam turbines, generators and other equipment to the Hinkley Point C project, the United Kingdom’s first new nuclear power plant in decades. By approving Hinkley Point on Thursday, the UK government cleared the way for GE to begin building two 1,770-megawatt Arabelle steam turbines and generators capable of powering six million homes and supplying about 7 percent of the UK’s power generation needs for 60 years, GE said. They will replace older coal-fired plants, GE said.
Reuters 16th Sept 2016 read more »
Franes O’Grady: It has been a long slog, but we got there in the end. After years of planning, work can now finally begin on the country’s first nuclear power station for a generation. While for some this is a controversial decision, I welcome the government’s go-ahead. At the TUC’s annual congress last week, our theme was “jobs, rights and investment”. Hinkley Point delivers all three. It will be the largest construction project in the UK, creating 25,000 high-quality jobs and 500 apprenticeships. It will bring in billions of pounds of foreign investment. At a time when our economy is facing uncertainty, it is good for business confidence and proof that Britain is still open for business. And a deal that’s been signed by trade unions and EDF energy will ensure working conditions at Hinkley are among the best and safest in the construction industry.
Guardian 16th Sept 2016 read more »
One of the most disturbing aspects of the Hinkley C decision is the cabinet minister responsible for delivering the project, business, energy and industrial strategy secretary Dr Greg Clark – in office only since 14 July this year- is demonstrably ignorant of his own department’s brief and policies. His 1992 doctorate from the London School of Economics (LSE), which also attended, is entitled, The effectiveness of incentive payment systems: an empirical test of individualism as a boundary condition. As someone whose own 1986 doctorate was entitled Nuclear Powers, on how nuclear reactor choices were made 1955-1979, and who has worked on nuclear energy policy ever since 1980,including three years on Dr Clark’s predcessor, (now Sir) Ed Davey’s Geological Disposal Implementation Board for radioactive waste (2012-14), let me challenge some of his more egregious errors in his statement to Parliament on Hinkley C on 15 September. In his statement he asserted: “Unlike in the past, the long-term decommissioning costs for the plant will be provided for explicitly as part of the funded decommissioning programme, and at a level that has been assessed independently as prudent and conservative.” This is both misleading and inaccurate. I have been involved for over seven years in the development of the complex process (including consultation round tables, consultation documents and discussion for a run by Government) determining how future radioactive waste costs will be paid. The bottom line is a cap on costs for nuclear plant owner/operators has been agreed, so if the costs go above the agreed cap, and are not covered by the extra insurance premium paid by the company, unfortunate future taxpayers will have to meet the extra costs. Dr Clark surely should know this; as should his special advisors.
David Lowry 17th Sept 2016 read more »
The momentum behind the energy revolution is straightforward: cost. While renewable energy and other energy technologies are plummeting in price, nuclear power continues its historical trend of getting ever more expensive. Even if the UK negotiates a sharp cut in the subsidies for Hinkley, it still could not be built before 2026 at the earliest. By then, a capacity crunch will have hit the UK as old power stations close. Hinkley puts a lot of generation capacity in one plan , which is very risky given the financial, legal and technical obstacles it faces. EDF, the French company leading the project, is taking on considerable financial risk, with Martin Young, an energy analyst at investment bank RBC Capital Markets, saying the project “verges on insanity”. Court challenges – including from EDF’s own trade unions – abound and the fiendishly complex project has been described by one nuclear engineer as unconstructable. Two attempts to build the same reactor in France and Finland are miles over budget and behind schedule. In contrast, energy efficiency could deliver six Hinkleys’ worth of electricity by 2030, according to the government’s own research. Four Hinkleys’ worth could be saved by increasing the ability to store electricity and making the grid smarter, with the latter alone likely to save billpayers £8bn a year. Capturing and storing carbon from fossil fuel plants is also vital, but has received scant attention from the government compared with Hinkley. It would halve the cost of beating global warming, according to government’s own official advisers, but in November ministers abruptly canned its plan. The government will not be able to get out of the Hinkley deal, however. Once signed, the deal with EDF contains a “poison pill” which could leave taxpayers with a £22bn bill if a future UK government shuts down the plant.in a smart, distributed system, knocking out one wind turbine or solar panel is barely noticed by the grid. The risk with Hinkley is that will it bring about the mutually assured destruction of both EDF and UK energy policy, with an expensive, hard-to-build reactor, in which the taxpayer will end up footing the bill.
Guardian 15th Sept 2016 read more »
What was the delay to Hinkley really all about? Those close to the deal that was originally agreed say you can hardly tell the difference between the two. I’m told the National Security Council had already considered the risks, and concluded that the existing rules on nuclear development were strong enough to deal with any problems. Officials had looked at the Liberal Democrat idea of the government holding a special share as an additional control on the deal and decided it wasn’t really necessary and wouldn’t make much difference. And huge diplomatic efforts had been made to push the deal through with the French and the Chinese. Theresa May’s team are acutely aware that even raising the possibility of tearing up the deal was a big risk. Much has been written about the reasons for the delay – concerns over cost, the French unions, security, and the environment. Yet given the similarities of what’s now been agreed, perhaps it’s worth looking not at why the PM delayed, but what would have happened if she had not?
BBC 15th Sept 2016 read more »
The genius of EDF has been to make Hinkley C impossible to ignore or derail by Labour, coalition, and Conservative governments alike. Its juggernaut status is, in part, because UK nuclear does need to be replaced with something low carbon, and replacing nuclear with nuclear is intuitive. But it’s been reinforced by old assumptions about baseload power. The reality of the UK’s energy system is that renewables are dominating new build because they have won the battle for cost and public support. The new power system challenge is to make the rest of the power system flexible enough to support a renewables dominated system without relying too heavily on fossil fuels. New technology is making this possible. Hinkley C will provide low carbon power but at a high price. Future British energy policy should break with the past and focus on developing, deploying and building new, smart technologies which we can sell to a renewably powered world.
Green Alliance 15th Sept 2016 read more »
Analysis done by Greenpeace found that ten advisers and civil servants who worked at the former Department for Energy and Climate Change (DECC) in the last five years had links to EDF. One was recently employed by the DECC and was also a manager at the Office for Nuclear Regulation, the regulator for the nuclear industry. This was before they became a licensing officer for EDF. An EDF Strategy Manager had a 13-month secondment to the DECC commercial team while working for auditors KPMG. As Greenpeace notes, the DECC commercial team “played a crucial role in deciding to press ahead with the Hinkley project”. It was this team which had oversight on who invested in Hinkley Point C. Additionally, a communications officer for EDF was previously the Senior Ministerial Visits Manager at DECC until early 2016. And a policy adviser and analyst for the now-defunct department had previously done the same job at EDF.
The Canary 15th Sept 2016 read more »
The French and the Chinese may be celebrating the UK’s decision to press ahead with the Hinkley C ‘nuclear white elephant’, writes Oliver Tickell. But the deal is a disaster for the UK, committing us to overpriced power for decades to come, and to a dirty, dangerous, insecure dead end technology. Just one silver lining: major economic, legal and technical hurdles mean it still may never be built. despite today’s announcement there remains considerable uncertainty as to whether HPC will actually be built – among them legal challenges in the European Court to the unbelievably generous subsidy package for the project which appears to be incompatible with the EU’s ‘state aid’ regulations. In addition both EDF and CGN, poised to take a 33.5% share in HPC, are unlikely to commit significant further capital to HPC until the Flamanville situation is resolved, and there is at least one working EPR to demonstrate that the design is constructable and operable – something that is still years away.
Ecologist 15th Sept 2016 read more »
THE Tories are backing the wrong energy horse with the “£100 billion boondoggle” that is the new nuclear power station Hinkley Point C, according to one of Scotland’s leading energy experts. Professor Peter Strachan, of Aberdeen’s Robert Gordon University, said the new station would risk increasing fuel poverty and consumer fuel bills. The £18 billion plant in Somerset – which is expected to create more than 25,000 jobs – is being financed by the French and Chinese governments, but Strachan said it would double the current price for electricity. “By opting for very expensive new nuclear build at Hinkley Point, and reducing support for renewable energy and energy efficiency measures, the Conservative Government is betting on the wrong energy horse,” he said. “This move will have the impact of hitting consumer bills and greatly increasing the risk of fuel poverty in Scotland and across the rest of the United Kingdom. “Fuel poverty is already higher in Scotland than England and the Scottish Government is more than justified in rejecting what will amount to a potentially £100bn boondoggle. “The Conservative Government should rethink its entire national electricity policy and ensure that more and not less support is given to onshore and offshore wind, and other marine renewables, as well as giving greater priority to energy efficiency measures.
The National 17th Sept 2016 read more »
Spent nuclear waste fuel from Hinkley Point C could be stored in wet storage ponds on-site for 160 years. By the time the station closes around 2085 the radioactive content of the waste will amount to the equivalent of 80% of the waste which already exists in the whole of the UK. The consequences of a fire in the Hinkley storage ponds could dwarf the accident at Fukushima. If you haven’t switched to a 100% renewable electricity supplier, it’s time to get switching so you don’t end up with your own share in the UK’s future legacy of nuclear waste.
No2NuclearPower 16th Sept 2016 read more »