The construction industry is breathing a collective sigh of relief after the decision today (15 September) to finally give £18bn Hinkley C power station the go-ahead after years of delay.
However, the green light from Theresa May after a surprise review comes with a new legal framework which imposes greater controls for future critical infrastructure and will include the government taking a stake in all new nuclear power stations going forward.
The new plant at Hinkley Point in Somerset is being financed by the French and Chinese governments through their energy arms EDF and China General Nuclear.
Jean-Bernard Lévy, chief executive of EDF, which is building the plant, said: “The decision of the British government to approve the construction of Hinkley Point C marks the relaunch of nuclear in Europe.
Greg Clark, secretary of state for business, energy and industrial strategy, 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 government is committed to ensuring the country has a secure low carbon energy supply. Hinkley Point C will be a critical part of that, and will inaugurate a new era of UK nuclear power, building on Britain’s strong nuclear legacy.
“Currently, the UK has eight power stations which generate around 20% of power in the UK. Almost all of these existing power stations are due to close by 2030. This underlines why the government needs to take decisions now on how we will ensure we have sufficient and diverse supply fit for future generations.”
“Hinkley Point C will provide 7% of Britain’s electricity needs for 60 years. UK-based businesses will benefit from more than 60% of the £18bn value of the project, and 26,000 jobs and apprenticeships will be created.”
China General Nuclear issued a statement in which it hailed the deal, saying it could now “move forward and deliver much-needed nuclear capacity at Hinkley Point, Sizewell and Bradwell” with its strategic partner, EDF.
It added: “CGN and EDF have worked together in close cooperation for decades and this has laid a solid foundation for these three new nuclear projects.
“CGN looks forward to leveraging its 30 years’ experience in nuclear construction and operation and playing an important role in meeting the UK’s future energy needs.”
Ian Maclean, UK managing director for energy & industry at WSP | Parsons Brinckerhoff, said:“This is the good news we’ve all been waiting for. After years of delays we can now look positively to the future, prepare our business and recruitment plans accordingly, and start filling the growing gap in our energy mix.
”However, this is just the beginning. We now need to start delivering not just on this one project but also other major nuclear projects (both big and small modular reactors) that are yet to get off the ground.”
Kier Group chief executive, Haydn Mursell, said: “Today’s decision marks a major step in the UK’s nuclear renaissance and reflects the country’s commitment to a balanced energy strategy including low carbon energy sources. Kier has excellent and proven capabilities in the nuclear industry and we look forward to working with EDF on the pipeline of opportunities that will arise from this project and on further energy projects in the UK in due course.”
Kier has been working in a joint venture with BAM Nuttall, to undertake site preparation works at Hinkley Point since 2012 and currently has approximately 350 employees working on the project.
Prof Dr Uwe Krueger, Atkins’ chief executive officer, added: “Today’s green light is a very positive step for the nuclear industry in the UK as a whole and an encouraging signal of commitment from the government to building crucial energy infrastructure in this country.
“Nuclear power is an important part of our energy mix and has a major role to play in the transition to a low-carbon future. We are looking forward to continuing our 30 year-long relationship with EDF Energy during the construction and operational life of Hinkley Point C.”
In July, EDF announced that it had made a final investment decision after board members voted 10 to 7 in favour of approving a deal. However, within hours the UK government said it would review the deal further before making a decision. Today’s announcement also revealed that the government has agreed that the Office for Nuclear Regulation will require notice from developers or operators of nuclear sites of any change of ownership or part-ownership.
This will allow the government to advise or direct the ONR to take action to protect national security as a result of a change in ownership, the government said.
However, there is concern in the industry that the construction of the new power plant will be anything but plain sailing.
“The length of time it will take to come online is a key issue, given the capacity gap that is looming in the UK. This approval does not mean the immediate start to construction and further delays are almost inevitable. Comparable nuclear projects in France and Finland have had massive cost and time overruns,” said analyst, Jonathan Robinson, Principal Consultant, Energy & Environment, Frost & Sullivan.
“Finland’s Olkiluoto is now running nine years late and will take 15 years in total to construct. On this basis, even if Hinkley is started now it will not be online until the 2030,” he added.
Meanwhile, experts at Sussex University Energy Group have condemned the decision to approve Britain’s first new nuclear power plant in 20 years.
Professor Benjamin Sovacool, director of the Sussex Energy Group, said: “This is a bad deal for the UK and we’re going to be counting the costs for decades.
“Hinkley C may make sense from an investment or trade standpoint, helping bring in new experience and contractors into the UK energy scene, but it is a step backwards in terms of cost efficacy.
“Energy efficiency practices and reductions in demand could have saved an even larger amount of energy at a fraction of a cost, as well as cost-effective renewables, such as wind and solar.”
Dr Philip Johnstone, research fellow in the Sussex Energy Group, added: “No amount of evidence regarding the immense costs and technical challenges experienced with the EPR reactor destined for Hinkley has changed the minds of British politicians.
“This decision defies logic in terms of economics or efficacy with the government’s own figures showing more practical and cheaper low-carbon alternatives.
“Britain is the only country in Europe so wedded to nuclear when others are turning away. We must now seriously question why the UK remains so uniquely attached to nuclear energy because on the grounds of costs, technical performance, and security this deal makes little sense.”
New government controls over critical infrastructure
The government will 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. This agreement will be confirmed in an exchange of letters between the government and EDF. 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 new legal framework for future foreign investment in British critical infrastructure will mean that:
- After Hinkley, the British government will take a special share in all future nuclear new build projects. This will ensure that significant stakes cannot be sold without the government’s knowledge or consent.
- The Office for Nuclear Regulation will be directed to require notice from developers or operators of nuclear sites of any change of ownership or part-ownership. This will allow the government to advise or direct the ONR to take action to protect national security as a result of a change in ownership.
- There will be reforms 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 will include a review of the public interest regime in the Enterprise Act 2002 and the introduction of a cross-cutting national security requirement for continuing government approval of the ownership and control of critical infrastructure.
