On Thursday the board of EDF will meet in Paris to give a final green-light for its £18 billion project to build a nuclear power station at Hinkley Point in Somerset. Billed as a critical piece of kit to meet Britain’s future electricity needs, while also cutting carbon emissions, Hinkley Point could churn out 7 per cent of British electricity for 60 years. The French government, which owns 85 per cent of EDF, hopes that by acting swiftly, only two weeks after Theresa May’s appointment as Prime Minister, it will stifle critical voices within her new administration and minimise the risk that highly favourable terms struck in 2013 to help to bankroll the station are watered down. Above all, EDF’s most cherished sweetener is a guaranteed price of an index-linked £92.50 per megawatt hour, well over double the present wholesale price, for 35 years. A final investment decision now also would help to avoid the risk that the project gets bogged down in the complexities of a French presidential election cycle, which will start in the autumn. Mr Clark says that he supports the scheme, but other senior figures within Mrs May’s administration are less convinced. Last year, Boris Johnson attacked the project as “disgraceful” and an “extraordinary amount of money” to spend. Nick Timothy, one of Mrs May’s key advisers, has described the project as “baffling” and warned of the security risks of allowing Chinese state-owned companies to invest in UK infrastructure projects. Steering Hinkley Point on to the UK grid is likely to take up a lot of Mr Clark’s time.
Times 25th July 2016 read more »
EDF recently announced that the final investment decision (FID) will be taken at a board meeting on Thursday, much earlier than expected. It had been pushed back until September, as EDF consulted the unions, a process which ended 4 July. But Paul Dorfman, an honorary senior research fellow at University College London’s Energy Institute who advises the UK government on nuclear issues, warned that the state-backed firm faces numerous issues. He told City A.M.: “If EDF decide to take a punt on Hinkley, it’s also because of the hugely generous financial support structure that the UK government is offering over a staggering 35 year contracted period.” “UK taxpayers and electricity consumers will be locked in to paying for the coming Hinkley debacle long after the current EDF Board and UK government decision-makers are dead and buried.” It comes as Greg Clark, the business and energy secretary, prepares to assure Japanese investors that are planning Britain’s next two plants after Hinkley of the government’s commitment to nuclear. While Hitachi and Toshiba are behind the Horizon project on Anglesey in north Wales and the NuGen plant in Cumbria respectively, funding for the schemes is yet to be found. The three-day trade mission to Tokyo, which kicks off tomorrow, is intended to shore up investor confidence following the Brexit vote.
City AM 24th July 2016 read more »