There’s an old Chinese proverb that goes: “When is the best time to plant a tree? A hundred years ago. When is the second-best time to plant a tree? Yesterday.”
For the China General Nuclear Corporation (CGN), which signed an agreement to take 33.5% stake in Hinkley Point C last October, whatever the initial timeframe for the nuclear power station, the Somerset mega-scheme is worth investing in.
So as nerves in the UK and France are increasingly jangled with each expected final investment decision delay, is now the time to look east for wisdom and focus on the big picture?
In 2007, EdF said that its Hinkley Point C new nuclear project would be up and running by 2017. Fast forward almost a decade and civils firms are still waiting for the official go-ahead.
Since the beginning of the year there has been the departure of two significant figures at EdF: Hinkley Point C project director Chris Bakken returned to the US to pursue new opportunities and has been clear that his departure wasn’t due to lack of confidence in the project; And this week it was reported that chief financial officer Thomas Piquemal resigned because of concerns the Hinkley project could jeopardise the energy giant’s finances, although this has not been confirmed by the company or Piquemal.
In the aftermath of Piquemal’s departure, EdF’s share price took a hit. In addition, a union at the heart of EdF is questioning the project and saying more time is needed before a decision. And many would like to see similar EdF projects in France and Finland up and running before any final commitment to Hinkley, but these too have been problematic and are delayed. For example, the project at Flamanville in France needs to finish testing on the Flamanville 3 European Pressurised Reactor reactor pressure vessel (RPV) closure head and bottom head.
Against the backdrop of what’s going on at EdF, the issue is also very politicised. Only last week Labour said the Government needs a “plan b” for Hinkley. Even celebrities are pitching in with Carol Vorderman Tweeting “isn’t it time to stop this debacle” in reference to the departure of Piquemal.
But as much as we can discuss and speculate, we simply won’t know whether EdF will go ahead with the final investment until it tells us. And what the company has been telling us all along is that it is committed to Hinkley Point C. Only on Monday, chairman Jean-Bernard Levy released a statement reiterating this: “With the support of its shareholder, the state, EdF can confirm that it is looking to invest in two reactors at Hinkley Point under the best possible financial conditions for the group, with the objective of making a final investment decision in the near future.”
It’s obvious that, so far, Hinkley Point C hasn’t gone to plan. If it had, construction would be well in hand. Since 2007, the timescale and the economics have changed dramatically. But what hasn’t changed is the UK’s need for energy, as well as the commitment of EdF, CGN and both the UK and French governments to Hinkley.
When prime minister David Cameron and French president François Hollande met in Amiens earlier this month at the 34th Franco-British summit, documents from the meeting said of Hinkley: “This major strategic project is a pillar of the bilateral relationship and will be a key aspect of Britain’s energy policy, offering the guarantee of safe, competitive, decarbonised energy by 2025.”
So while the day-to-day rollercoaster of news stories on Hinkley provides plenty of fodder for debate about if and when the project should go ahead, is it time to steady our nerves, take inspiration from the Chinese proverb, and simply say that any time soon will be the second best time to build Hinkley Point C?