Hours after the £18 billion nuclear power plant was given the go ahead by its French backers EDF Energy on Thursday, the government decided to delay the Hinkley Point C project further by launching a further review. Greg Clark, the new Business and Energy Secretary, announced that a final decision will now be delayed. He 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.”
This has thrown further doubt on the completion of the project which was originally expected to be sometime next year. The project has been hit with a series of setbacks and delays and completion is now more likely to be 2033. Hinkley Point C will be the first newly built nuclear power plant in the UK since 1995 and will deliver 7% of the UK’s electricity when most other nuclear power stations will have closed down. The construction will provide 25,000 jobs. At its peak, 5,600 people will work on site and the finished power plant will employ 900 people.
The project has been met with a large amount of criticism and controversy. Investment uncertainty was the main concern following last month’s Brexit decision and this further government delay is fuelling doubts. EDF’s contract with the government guarantees the firm a ‘strike price’ of £92.50 per megawatt-hour for the electricity that Hinkley Point generates. This is currently more than double the current market price of power meaning that UK consumers would make up the difference. Britain signed a 35-year ‘contract for difference’ price guarantee deal with EDF in 2013, committing UK consumers to topping up how much the power company will be paid for energy if prices fall below the £92.50 per megawatt-hour. This contract means that EDF is guaranteed to make a profit on power generated from Hinkley even if market prices drop below that level. Due to the decrease in wholesale cost since the contract was agreed, the National Audit Office says that as a result, the expected top-up payment by consumers has increased from £6.1bn to £29.7bn.
Despite the doubts, Jean-Bernard Levy, the chief executive of EDF, said on Friday he had no doubt about the government’s support; ‘“There is no comment to make. The statement made by Mr Clark is perfectly clear,” he said. “I have no doubt about the support of the British government led by Mrs May.”