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New nuclear plant project thrown into confusion after decision delayed

Published 29/07/2016

An artist's impression issued by EDF of plans for the new Hinkley Point C nuclear power station
An artist's impression issued by EDF of plans for the new Hinkley Point C nuclear power station

The future of the first new nuclear power plant in a generation has been thrown into confusion after the Government delayed a decision until the autumn.

French energy giant EDF gave the final approval to go ahead with the £18 billion project at Hinkley Point in Somerset, despite a split in the board, but the Government said it wanted more time to study the details.

The move stunned the industry and prompted warnings that jobs were at risk, though Government sources insisted the delay had been agreed with the French.

Critics believe the Government has been stung by criticism of the amount of money EDF will be paid for generating power from Hinkley - £92.50 per megawatt hour of electricity generated.

It is thought there are also security concerns about the role of the Chinese state - which has a one third share in the project - investing in critical infrastructure in the UK.

Prime Minister Theresa May's chief of staff Nick Timothy has previously condemned Chinese involvement in the UK's nuclear sector.

The influential aide wrote on the ConservativeHome website in October 2015 that it was "baffling" that the Government would allow Chinese state firms to invest in sensitive infrastructure.

Mr Timothy wrote that "rational concerns about national security are being swept to one side because of the desperate desire for Chinese trade and investment".

He suggested security experts were worried the Chinese could build weaknesses into computer systems that would allow them to "shut down Britain's energy production at will" and argued against giving a "hostile state" access to the UK's critical infrastructure.

In response to the shocked reaction to the delay, a source said T heresa May and Francois Hollande had discussed the deal during the Prime Minister's visit to Paris last week.

"The timetable was agreed with the French government," a source said, indicating that a decision was expected to be taken in September.

The delay was not announced until after EDF had made its decision because ministers were keen for the energy giant to finally commit to the project, b ut it was always the case that the Government would have the final say over the deal.

While under David Cameron that would have effectively been a "rubber stamping" of a project he enthusiastically backed, Mrs May's administration wants to look at the project "in the round as part of its industrial strategy".

"It is ironic it happened so soon after the new government came in. Of course it's right for a new government to want to take time to look at something like this and think through its industrial strategy."

It is a "prudent and pragmatic thing to do," the source said.

But the G overnment has been warned that thousands of jobs are being put at risk by its "bewildering" decision.

Around 25,000 jobs will be created by the project, which is already years behind schedule.

Justin Bowden, the GMB union's national secretary for energy, told the Press Association: "Theresa May's decision to review the go-ahead is bewildering and bonkers. After years of procrastination, what is required is decisive action not dithering and more delay."

The sector was alerted to the delay by a brief statement from Business and Energy Secretary Greg Clark, which said: "The UK needs a reliable and secure energy supply and the Government believes that nuclear energy is an important part of the mix.

"The Government will now consider carefully all the component parts of this project and make its decision in the early autumn."

EDF's chief executive Vincent de Rivaz was expected in Somerset alongside senior company officials to give interviews about the project.

But following the Government statement, it emerged that no interviews would take place.

Officials from state-owned China General Nuclear (CGN) had also been expected to attend an event.

A statement said: "We respect the new Government's need to familiarise itself with a project as important to the UK's future energy security as Hinkley Point C and we stand ready to help the Government in this respect.

"CGN remains committed to delivering this much-needed nuclear capacity with our strategic partners, EDF, and providing the UK with safe, reliable and sustainable energy."

Industry groups had welcomed the EDF decision but were soon expressing concern about the fresh delay.

Commons Energy and Climate Change Committee chairman Angus MacNeil said the Government might have put the brakes on the "very bad" deal as it may cost less in the long run to pull out now.

"I think the Government might have expected EDF to blink first," he told BBC Radio 4's World At One.

"EDF are not unanimous over this at all but now that EDF have gone ahead they could be collecting quite a bonanza from the UK bill-payer if they finish by 2029, so the Government is perhaps now thinking of blinking itself.

"It may have penalties involved with that blinking but it could be an awful lot cheaper in the longer run to blink now instead of paying later.

"Whichever way you cut it, I think this is a very bad energy deal."

He added: "EDF, if they can deliver this by 2029, are laughing all the way to the bank."

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