The board of French EDF yesterday gave the go-ahead for the state-controlled utility’s controversial project to build two nuclear reactors in Hinkley Point in Somerset, England. They will be the first new nuclear reactors in the UK in a generation.
Following the resignation of board member Gerard Magnin in protest over EDF’s strategy ahead of the meeting, the remaining 17 board members narrowly voted in favour of the final investment decision for the £18 billion project, with 10 votes in favour and seven votes against.
If Mr Magnin had not resigned and had voted against Hinkley Point, the Hinkley Point project would have been approved with a 10-eight vote, or just one vote to spare.
“This deal was riven with more dissent in the EDF board than anyone expected. It’s an unprecedented division and a far closer [vote] than predicted,” John Sauven, Greenpeace UK executive director said.
EDF, which was not available for comment, says the Hinkley Point project will be profitable and the French government says it will support the French nuclear industry over the next decade.
The British government says Hinkley Point, which will provide about 7 per cent of UK power, is crucial for securing power supply in the next decade. Yet the project has strong critics on both side of the English Channel. French unions say the project is too big and costly for EDF and jeopardises the survival of the company. Opponents in Britain say the price at which the government has agreed to buy power from EDF for 35 years, at more than twice current market levels, is too high.
The Hinkley Point project is a cornerstone of Britain’s future energy policy. The country, one of the oldest nuclear power-generating nations in the world, is relying on new nuclear plants such as Hinkley Point to replace ageing stations. Nuclear plants do not emit any carbon and will thus help the UK meet its target to cut carbon emissions by 80 per cent by 2050.
The government signed a 35-year electricity price guarantee contract with EDF in October 2013, under which the utility will receive a top-up fee if power prices are below £92.50 per megawatt-hour (MWh). The British day-ahead power price is about £40 per MWh.
Britain is not involved in funding the upfront costs of the project, which are carried by developer EDF and its partners. However, the contract-for-difference agreement means Britain will be paying for electricity generated from the plant if market prices are below the strike price level.
The National Audit Office has estimated that a recent fall in power prices has meant EDF’s estimated top-up payments over the plant’s lifetime have risen to £29.7 billion from £6.1 billion since 2013.
The project was first announced in 2007, when EDF energy’s chief executive said Britons would be cooking their 2017 Christmas dinners with electricity supplied by Hinkley Point.– (Reuters)