Decision to postpone Hinkley Point C branded ‘bewildering and bonkers’

EDF’s commitment to proceed with Hinkley Point C has suffered a setback with government postponing its decision on the new nuclear plant until the autumn.

The government was expected to sign agreements for EDF and its partners to build two nuclear reactors in Somerset following approval for the project by the board of the French energy company.

According to IChemE, the delay brings further confusion to UK energy policy on top of a period of upheaval that has seen the withdrawal of government support from wind and solar projects, a continued loss of coal-fired generating capacity, and the cancellation of a £1bn capital grant for carbon capture and storage in November 2015.

The GMB union has branded the government delay on Hinkley Point C ‘bewildering and bonkers’.

Justin Bowden, GMB national secretary for energy, said: “After years of procrastination, what is required is decisive action, not dithering and more delay. This unnecessary hesitation is putting finance for the project in doubt and 25,000 new jobs at risk immediately after Brexit. It is a gross error of judgement and must be reversed.

“Building Hinkley will not on its own make up for successive governments’ failure to have in place a coherent energy policy, but it is a very important step along that road and, as GMB has been warning now for months, the country’s energy capacity is already so fragile that if we have a cold winter there is a high likelihood we will experience power cuts.”

EDF_Hinkley

Tom Greatrex, chief executive of the Nuclear Industry Association added: “The government’s decision to take longer to look at the contract does not change the fundamentals – that by 2030, two-thirds of our electricity generation capacity will have retired, and we need to replace it with low carbon and reliable power for the future to improve our energy security and meet our commitments on carbon emissions targets.

“The most important thing is that the board of EDF and its investors have the finance in place to enable them to give the go ahead for the project and that is very good news. We have a strong UK supply chain which has built up its capability and has trained people so they are able to build and operate Hinkley Point C.

“We now need the new ministers to quickly endorse the decision to show they are serious about industrial strategy, building new infrastructure by securing inward investment to create our low carbon energy supplies of the future.”

According to the 2015 Digest of UK Energy Statistics (DUKES), nuclear power’s contribution to the grid increased from 19 per cent in 2014 to 21 per cent in 2015.

The Engineer says

Frankly, we were as wrong-footed by the announcement of the delay as everybody else. Greg Clark’s two-sentence announcement gives us very little to go on and like all other media sources we can only speculate, but to us, it’s a good sign that the delay was announced by BEIS. The industry department (BIS in the last two administrations) seems to have played little role in the negotiations over the Hinkley Point deals with AREVA, the French government and China, with George Osborne’s Treasury taking the lead; Clarke announcing the delay might suggest that his department is looking for ways to boost UK industry’s involvement in the project. One possibility might be to insist on the use of steel smelted in the UK; the main components cannot be fabricated here as there are no facilities large enough or qualified to use IAEA-approved techniques, but specifying the materials might be within the realms of possibility.

We could also look at Osborne’s successor as Chancellor, Philip Hammond, for clues as to the delay. As Foreign Secretary at the time of the original negotiations, Hammond would have had full access to the Security Services’ reports on China, and with this knowledge, might well want time to scrutinise the concessions that Osborne’s team agreed, such as giving China the right to build a power station at Bradwell in Essex.

The Engineer stated at the time of the original AREVA negotiations that the strike-price for electricity from Hinkley C looked too high. Although unexpected, it has to be a hopeful sign that Theresa May’s government is prepared to risk looking foolish to scrutinise what was an unfavourable deal that would have caused problems for other generators, particularly renewables. We can only speculate on how much of this was discussed with French President Francois Hollande when he met May last week, and why EDF appears to have been taken off-guard as well.

Stuart Nathan