The Government has agreed a revised deal with EDF that gives the green light for the £18bn Hinkley Point C nuclear power station to be built and which impacts on all foreign investment in critical infrastructure in the future.
The much-delayed decision comes after EDF was blindsided in June when its board approved the Somerset project, only to be told by the Government that it wanted to review the deal.
The new deal means EDF must get Government approval if it wants to sell its controlling stake in the power station before construction is completed. It also means that once Hinkley is in operation, the Government can intervene if EDF tries to sell its stake.
For future nuclear new builds, the new legal framework means the Government will take a share in all future nuclear new build, so that significant stakes in them can’t be sold without Government knowledge or consent. In addition, The Office for Nuclear Regulation must be informed of any change of ownership or part-ownership, so that it can step in if it thinks the change means it needs to protect national security.
For critical infrastructure in general, the public interest regime in the Enterprise Act 2002 will be reviewed so that any foreign ownership is fully scrutinised. In addition, there will be national security requirements for any Government approval of foreign ownership and control of critical infrastructure.
Secretary of State for Business, Energy and Industrial Strategy Greg Clark said: “Having thoroughly reviewed the proposal for Hinkley Point C, we will introduce a series of measures to enhance security and will ensure Hinkley cannot change hands without the Government’s agreement. Consequently, we have decided to proceed with the first new nuclear power station for a 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.”
EDF said this new legal framework for critical infrastructure will provide a sound basis for the projects at Hinkley Point C, Sizewell C and Bradwell B. It said it wants to sign the agreements to go-ahead at the ’earliest opportunity’.
Chairman of EDF Group chairman Jean-Bernard Lévy said: “The decision of the British Government to proceed with Hinkley Point C marks the relaunch of nuclear in Europe. It demonstrates the UK’s desire to lead the fight against climate change through the development of low carbon electricity. This decision demonstrates confidence in the EPR technology and in the world renowned expertise of the French nuclear industry. I congratulate the teams of EDF who have developed this project to maturity with enthusiasm, professionalism and determination.”
Commenting on the decision, Institution of Civil Engineers (ICE) director general Nick Baveystock said: “The Prime Minister’s decision to approve the project is a major step forward for the future of UK energy security. The decision comes at critical time, demonstrating confidence in the infrastructure sector and in the UK as a place to invest. Nuclear is part of a combined approach to the UK’s energy mix and must form part of coherent energy policy. The ICE led National Needs Assessment, due to be published in October, highlights the fundamental role of energy in underpinning all of our other infrastructure services - now and in the future.
“Nuclear provides a good base load power source, but the new fleet is at least 10 years away from power generation and capacity margins are tightening. Technologies such as new combined cycle gas turbines, renewables and electricity storage must be driven forward, alongside demand management initiatives.”