UK approves Edf’s £18 billion Hinkley Point nuclear project

UK approves Edf’s £18 billion Hinkley Point nuclear project

The U.K. government has approved Electricite de France SA’s controversial plan to build two nuclear reactors for 18 billion pounds ($24 billion) in southwest England.

Hinkley Point C will proceed under the condition that EDF – which has a Chinese partner in the project – won’t be able to sell down its controlling stake prior to completion of construction without government approval, the Department for Business, Energy and Industrial Strategy said in a statement Thursday. The much-criticized guaranteed electricity price that underpins the development wasn’t changed.

U.K. Prime Minister Theresa May decided to review Hinkley Point at the end of July, casting doubt on a project approved by her predecessor David Cameron as a way of reducing greenhouse gas emissions. The unexpected delay came amid concerns about the scale of potential subsidy for the plants and whether Chinese involvement was a security risk. While EDF says the development is vital for the future of the French nuclear industry, there are still concerns about the financial strain it will place on the utility.

“Britain needs to upgrade its supplies of energy, and we have always been clear that nuclear is an important part of ensuring our future low-carbon energy security,” Secretary of State for Business, Energy and Industrial Strategy Greg Clark said in the statement. “Having thoroughly reviewed the proposal for Hinkley Point C, we will introduce a series of measures to enhance security,” and therefore decided to proceed, he said.

The approval crowns almost a decade of efforts by EDF to prepare for the replacement of its U.K. nuclear fleet, acquired when it took control of British Energy Plc in 2008. Jean-Bernard Levy, chief executive officer of the state-controlled utility, has said Hinkley Point, which will use the EPR reactor design, is key to ensuring the health of the French nuclear industry and providing work for struggling nuclear group Areva SA.

Source: Bloomberg

Date: September 2016

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