The construction of Hinkley Point C, the UK’s first new nuclear power plant in over 20 years, has been agreed in principle by the United Kingdom government.
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The deal means that EDF will not be able to sell its stake before the completion of construction of the two-reactor plant in Somerset, southwest England, without approval from the United Kingdom government. “This agreement will be confirmed in an exchange of letters between the Government and EDF”.
In a statement, the government said: “After Hinkley, the British Government will take a special share in all future nuclear new build projects”.
EDF’s CEO Jean Bernard Levy told a news conference that the company had no intention of giving up controlling stake in Hinkley Point.
The government said in a statement that it had made a decision to proceed with the 18 billion-pound ($23 billion) Hinkley Point plant in southwest England, but that future foreign-funded infrastructure projects will be subject to tighter rules.
The decision follows months of delays to the £18 billion ($23.82 billion) project, which has drawn criticism from EDF officials and French labor unions anxious about its impact on the company’s finances, and in the United Kingdom where some politicians and environment groups consider it too expensive and risky.
The power station will create 25,000 jobs, hundreds of apprenticeships and deliver 7% of the UK’s electricity in 2025.
Olivia Gippner, a fellow in EU-China relations at the London School of Economics, said the framework was aimed at China but “by introducing a general national security test rather than focusing only on Chinese investment, this is a very diplomatic solution”. It’s set to be built next to existing Hinkley Point power station site.
‘China will not be building this plant or operating it, ‘ the insider said.
According to an agreement between CGN and EDF, the Bradwell project plans to use the Hualong One design, China’s third-generation nuclear reactor design, after the technology passes British regulatory inspections.
Having pushed back its decision on whether to invest in Hinkley, EDF says the 2023 completion date would not be met.
Levy said will sign deal with United Kingdom government on Hinkley Point in coming days, adding that the group’s refinancing plan remains in place and will not be modified. After the station is operational, the United Kingdom government will also retain the ability to intervene if EDF tries to sell its stake.
The plant, with two reactors, is due to open around 2023, becoming the first new nuclear plant in the U.K.in a generation, BBC News reports.
Hinkley Point would produce around seven per cent of the UK’s energy while Sizewell and Bradwell would provide a further 12 per cent between them, potentially giving the Chinese involvement in almost one-fifth of the country’s electricity generation.
“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”, Greg Clark, the secretary of state for business and energy, said in the statement.
There had also been concerns about the high price (£92.50 per megawatt hour) Britain had agreed to pay to EDF for the electricity generated, which has been called “extortionate”.
However, A spokeswoman for the department of business and energy said that while Bradwell is “a component part” of the Hinkley deal, “it will still need to be approved in terms of planning and security in the same way”.
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While it isn’t explicitly stated, these new rules are to prevent China (or another foreign country) from owning a controlling share of nuclear infrastructure in the UK. The National Audit Ofice has since estimated this could cost United Kingdom consumers up to £30bn – five times more than originally expected.
