Business

Hinkley Point nuclear plant delay 'bonkers' says union

  • 29 July 2016
  • From the section Business
Media captionWhy do we need a new nuclear plant? Simon Jack explains

The government's surprise announcement to delay a final decision on Hinkley Point has been described as "bonkers" by the GMB union and "chaos" by Labour.

French firm EDF, which is financing most of the £18bn project in Somerset, approved the funding at a board meeting on Thursday.

The government then said it was "only right" to review the project and would make a decision by the autumn.

Contracts were supposed to have been signed on Friday.

The BBC's political correspondent Eleanor Garnier said because of the change of government and the significance of the project, Number 10 felt it was perfectly reasonable to re-visit the deal.

"As I understand it, the PM's team believe it was not for them to say in advance of the EDF board meeting what their thinking was.

"The company might have wanted the UK government to make its position clear first but Mrs May was not going to be bounced into it.

"I'm being told we should not over interpret the review - there's a sense of reassurance rather than policy being ripped up to start all over again," our correspondent added.

Simon Jack: Hinkley delay is a high stakes bet

Kamal Ahmed: Why did the chancellor tell me Hinkley 'will go ahead' five days ago?

Carrie Gracie: Is China the hitch for Hinkley Point?

Somerset hopes for Hinkley jobs boost

Hinkley Point: What is it and why is it important?

Jean-Bernard Levy, EDF Group chief executive said he remained confident the project would go ahead.

"I have no doubt about the support of the British government led by Mrs May."

'Dithering and delay'

But Justin Bowden, the GMB union's national secretary for energy described Mrs May decision as "bewildering and bonkers."

"After years of procrastination, what is required is decisive action not dithering and more delay.

"This unnecessary hesitation is putting finance for the project in doubt and 25,000 new jobs at risk immediately after Brexit".

Labour's shadow energy secretary, Barry Gardiner, said there was a role for nuclear power as part of a low carbon future, but the government's handling of the situation had been "absolute chaos".

"At a day's notice they have cancelled the final signing of the agreement that they told the press and everyone they were going to do.

"I'm hoping what they will do is take two to three months to seriously review it," Mr Gardiner added.


Analysis: John Moylan, BBC Industry Correspondent

EDF's decision yesterday to back Hinkley Point was expected to be swiftly followed on Friday by the government and the French firm signing the key contracts that underpin the deal.

Instead government sources say with a new leadership in the country it is right to consider this huge infrastructure project.

They add that a timetable has been agreed with the stakeholders in the project.

But EDF and the government had briefed journalists in recent days that these key contracts would be signed today.

Sources have told me that Chinese officials - here to sign up to their stakeholding in Hinkley - will now be returning home.

There's no suggestion that the new government is going cold on this long delayed project.

But the events of the last 24 hours will send mixed signals about Britain being open for business in the wake of the referendum vote.


China concerns

One third of the £18bn cost is being provided by China General Nuclear Power Corporation (CGN) which has reiterated its support for the project.

But a source close to CGN has told the BBC that everyone in the company was "bemused" by the sudden nature of the government's announcement and had been given no real insight into the reason for the delay other than being informed it was something the prime minister wanted.

It was also frustrated that the government had allowed speculation about national security concerns to continue.

Nick Timothy, who is a close adviser to Mrs May, has previously raised serious concerns about Chinese investment in areas that could threaten Britain's security.

Last year, the chancellor at the time, George Osborne, said investment in Hinkley Point could lead to the Chinese designing and constructing a new nuclear reactor at Bradwell in Essex.

At the time Mr Timothy wrote on the Conservativehome website that if that happened experts feared China could "build weaknesses into computer systems which will allow them to shut down Britain's energy production at will".

'Enormous deal'

Ian Liddell-Grainger, the Conservative MP whose constituency includes Hinkley Point, said Mrs May was doing exactly the right thing.

"We're talking about three countries, we're talking about an enormous deal for the United Kingdom, for France and for China. She (Theresa May) wants to make sure it's the right job and that's what she's doing."

Image copyright PA
Image caption Greenpeace called for the 'radioactive white elephant' to be stopped in its tracks

Critics of the plan have warned of environmental damage and potential escalating costs.

Britain has committed to pay a price more than twice the current market levels for the power generated by the plant over 35 years.

Greenpeace executive director John Sauven said: "Theresa May now has a chance to stop this radioactive white elephant in its tracks.

"She should look at the evidence and see that this deal would be a monumental disaster for taxpayers and bill payers.

"The UK needs to invest in safe, reliable renewable power."

Media captionFormer energy secretary Lord Barker says Hinkley Point likely to go ahead

But Malcolm Grimston, a senior research fellow at Imperial College London, said the case for Hinkley Point C had not changed and the arguments for it remained strong.

"My own view is gas prices cannot stay at artificially low levels forever on the back of the oil price collapse, as it is at the moment.

"We need to invest in something more rapidly because so many of our power stations are reaching the end of their lives."

Hinkley Point construction

5,600

workers on site at peak

  • 4,000km electrical cabling

  • 230,000 tonnes of steel

  • 5.6m cubic metres of earth to be moved

'Yet another blow'

Tom Greatrex, the chief executive of the Nuclear Industry Association, urged the government to make a decision as soon as possible.

"We need to get on and do this and that's why I'm hoping the government make their decision very soon because if it goes on for a lengthy period of time we are going to run the risk of having real problems in terms of our energy supplies," he said.

"Then what happens is that we end up paying a lot more and we end up paying for much more dirty power which we can't afford to do if we are to meet our climate commitments."

Hinkley Point C is expected to provide 7% of the UK's total electricity requirement.

During morning trading on the Paris stock exchange, EDF's share price rose 8%.

Shareholders appear to have been buoyed by EDF's continuing confidence in the deal.


Hinkley Point timeline

Jan 2006 - Government proposes nuclear as part of future energy mix

Mar 2013 - Construction of Hinkley Point approved

Oct 2013 - UK government agrees £92.50 per megawatt-hour will be paid for electricity produced at the Somerset site - around double the current market rate at the time

Oct 2015 - EDF signs investment agreement with China General Nuclear Power Corporation (CGN)

July 2016 - EDF board approves final investment decision, but the UK Government postpones a final decision on the project until autumn.


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