After something of an uphill struggle, EDF Energy has finally reached a final deal allowing the building of the Hinkley Point nuclear power plant.
A Tricky Start
EDF’s plans to build a nuclear power plant in Somerset have taken a while to fully get off the ground. With estimated costs repeatedly increasing until they reached £25 billion, and with investors growing ever more sceptical due to constant delays and extensions to the time frame, there was a point when it looked like the plans would have to be shelved altogether.
Part of the worry was borne of concerns regarding the EPR reactor design that had been the root cause of failures and delays in the construction of various nuclear power plants whose plans were further ahead than Hinkley’s at the time.
But now, worries have subsided as plans to go ahead with construction have now been confirmed following a deal between EDF and state-owned China General Nuclear Power Corporation (CGN), who will pay £6 billion of the £18 billion total cost and will receive a third share of the plant in return. EDF have maintained that they will hold onto a majority stake of the project, but have said that they may be selling off a further 15% of it.
The deal was announced yesterday during a public conference held by David Cameron and the Chinese President, Xi Jinping, as he begins a four day state visit. During the rest of his visit, it is thought that he will announce further deals between China and the UK, worth around £30 billion.
The move is part of a larger scale plan to build up a solid nuclear partnership between the UK and China that also involves further development of new nuclear plants at Bradwell and Sizewell.
The plant at Hinkley Point in Somerset has been given a target date of 2025, at which point it is supposed to start producing electricity. It is the only one of the three with such a date in mind though; both Bradwell and Sizewell are still in the very early stages of development.
Despite criticism over the feasibility of the whole project, and over the potential increase in the prices for the energy at the customer level that may come off the back of the expensive enterprise, the government have maintained that this deal is a good thing.
They have announced that some 25,000 new jobs will be created off the back of these deals – news that will be welcome after the furore surrounding the cut backs at Tata steel recently. While the finger of blame has been pointed toward China by some over the steel plant job cuts, it will be interesting to see the response to these government claims over new jobs coming about, thanks to China.