28 Jul (NucNet): French state-owned utility EDF has approved construction of the two-unit Hinkley Point C nuclear station – the first nuclear plant to be built in the UK in a generation.
After a board meeting today EDF said in a statement: “Following this decision, the conditions have been met to allow EDF to sign the contracts with the British Government, EDF’s historic partner China General Nuclear Power Generation (CGN), and the main suppliers of the project.”
The statement said: “At its meeting on 28 July 2016, EDF’s Board of Directors made the final investment decision and gave the President the authorisation to ensure its full execution in the framework of the signature process of all the contracts and agreements necessary to build the two nuclear reactors at Hinkley Point C in Somerset, in southwest England.”
Total construction costs to first operation are forecast to be £18bn (€21bn, $23bn), which includes inflation. The construction costs have remained stable in real terms since they were announced in October 2013, EDF said.
Hinkley Point C will provide 7% of the UK’s electricity over its estimated 60-year lifespan and is scheduled to begin commercial operation in 2025, several years later than planned. It will be the UK’s first new nuclear station since Sizewell B, which began commercial operation 20 years ago, in September 1995.
EDF said the decision to go ahead with Hinkley Point C would enable the company to “mobilise its nuclear engineering skills”. The first concrete for Unit 1 at Hinkley Point C, scheduled for mid-2019, would coincide with the startup of the Flamanville-3 EPR in northern France, scheduled for the end of 2018.
EDF Energy, the UK subsidiary of EDF, said the Hinkley project is “well advanced”. It has achieved planning consent, design approval for the EPR reactor and a nuclear site licence.
The delay in approving Hinkley Point C, construction of which was given the go-ahead by the UK government in 2013, has been largely due to concerns about EDF’s financial health, which had been compounded by the burden of the Flamanville-3 EPR project in northern France.
French unions had warned that the company, 85% owned by the French government, could be ruined by the cost of the UK project. EDF had sought a partner to spread the burden and CGN Corporation is taking a 33.5% stake in the project.
Earlier this week EDF shareholders approved plans to issue new shares to raise €4bn ($4.4bn) to help pay for the project. The French state will buy €3bn worth of new shares in the fundraising.
Last month senior managers at EDF told British MPs that a final investment decision on Hinkley Point C should be delayed until problems including the reactor design and “multi-billion litigation” over the Olkiluoto-3 EPR project in Finland have been resolved.
In April, EDF said it was delaying the decision while it consulted with trade unions. That non-binding process of consultation with a council of employee representatives, a process required under French law before a company can undertake a major project, ended earlier this month.
EDF declared the works council scrutiny at an end because the period set aside for it had expired. However, several of the trade unions represented on the council said as they were unable to give a view on the HInkley Point C project one way or the other.
UK business and energy secretary Greg Clark said last week: “New nuclear is an essential part of our plan for a secure, clean and affordable energy system that will power the economy throughout this century.”
Unite, the UK’s largest union with 1.4 million members, yesterday urged the EDF board to approve the project, which the union said will generate thousands of skilled jobs and help meet the UK’s energy needs for decades to come. Describing the project as vital to keeping the lights on in Britain and central to western England’s economic success, Unite said workers were “ready and raring” to get started on the full project.
Garry Graham, deputy general secretary of Prospect, the largest union for professionals, managers and specialists in EDF and the wider UK energy sector, said yesterday: “Energy margins for the UK continue to decline and we need to take the practical steps which ensure that we keep the lights on and transition to low carbon generation. A final investment decision will be good for jobs, good for consumers, good for the environment and good for the economy.”
Hinkley Point Timeline
Jan 2006: Government proposes nuclear as part of future energy mix
Feb 2012: Preparatory works begin on-site.
Mar 2013: UK government approves construction of Hinkley Point C
Oct 2013: UK government agrees £92.50 per megawatt-hour ‘strike price’ will be paid for electricity produced at the site – around double the market rate at the time
Oct 2014: European Commission approves agreement between EDF Group and UK government
Oct 2015: EDF signs investment agreement with China General Nuclear Power Corporation (CGN)
July 2016: EDF board meets on 28 July to consider final investment decision
Hinkley Point in Numbers
- 3,200 MW nuclear power station with two European Pressurised-Water Reactors (EPR) of 1,600 MW each
- Capable of generating 7% of the UK’s electricity
- Enough power for around 6 million homes
- Avoids emission of 9 million tonnes of CO2 a year
- At least 25,000 different job opportunities during construction and 900 during 60-years of operation
- Construction cost £18bn
- 60% of the construction value to UK companies
