France 'committed' to Hinkley Point nuclear power station - but no decision for five months

The British government would face huge embarrassment if Hinkley Point, intended as the first of three new mega power stations, was abandoned or postponed

An artist's impression of the proposed station on the Somerset Coast
An artist's impression of the proposed station on the Somerset Coast

France is committed to the £18bn power station but no final investment decision will be made before September, the French economy minister, Emmanuel Macron, has said.

Mr Macron rejected suggestions that the French electricity giant, EDF, could walk away from the British project or delay it for several years. He confirmed, however, that a much delayed announcement by EDF had been postponed for at least another five months to try to sell the project to the company’s anxious unions.

“The final decision to invest in the project could be made next September,” Mr Macron said in an interview with the Journal du Dimanche.

EDF unions have made it clear that they hope to push off a decision until early 2017 – when France will be entangled in a presidential election campaign. Union sources say that thay they will insist on prolonged, new studies of the financial and technical feasibility of Hinkley Point, which is supposed to supply 8 per cent of UK electricity by 2025.

Any lengthy delay would call into question an already tight timetable to complete the two “new generation”, high-pressure water reactors at Hinkley by the middle of the next decade.

Mr Macron said in his interview on Sunday that the British government would “not wait” and would “go to our competitors” if the project is seriously delayed.

“This project is…essential to the continuing presence of EDF in Great Britain,” the minister said. “What would we say to other countries like India, South Africa or Poland who want to launch their own nuclear programmes?”

“We would leave the field free for our American, Chinese or Russian competitors. And then what competence would we have to renew our own nuclear power stations?”

The sun sets on the Hinkley Point nuclear plant in Somerset

Mr Macron confirmed that the French government, which owns 80 per cent of EDF, was providing an extra Euros 5bn to strengthen the company’s ailing finaces. He said that this would take the form of a Euros 3bn state contribution to a Euros 4bn increase in equity and the waiving of Euros 2bn in dividends due to the state for the years 2016 and 2017.

Senior engineers and unions at EDF fear that the Hinkley project could destroy an already weakened company. They have demanded a delay of at least two years to allow uncertainties about the new generation reactors planned for Hinkley to be resolved.

An internal report to the EDF board warned in February that the project could be financially disastrous, despite a commitment by the UK government to pay double the market rate for Hinkley’s electricity.

Although China has agreed to invest £6.2 billion in Hinkley Point, EDF has failed to find other backers leaving it responsible for two thirds of the cost.

Both Paris and London have applied intense pressure on EDF to go ahead immediately. The British government would face huge embarrassment if Hinkley Point, intended as the first of three new mega power stations, was abandoned or postponed. In September last year, the Chancellor George Osborne said Hinkley Point was a central part of the government’s strategy to “make sure the lights stay on”.

“The current generation of nuclear power stations are coming to the end of their life. That’s going to create a very big hole in our base electricity supply unless we do something about it,” he told a House of Lords committee.

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