Hinkley agreement signed at last

4 October 2016

The GBP18bn ($24bn) agreement for construction of the Hinkley Point C NPP was signed behind closed doors in London on 29 September in a low-key ceremony attended by UK Business Secretary Greg Clark, French Foreign Minister Jean-Marc Ayrault and China's National Energy Administration Director Nur Bekri. The final agreements enabling construction of two EPR units at Hinkley to proceed were signed by the UK government, major investor EDF and China General Nuclear (CGN), which has a 33.5% share in the project.

After months of uncertainty and delay, the project to build two European Pressurized Reactor (EPR) units at Hinkley, was only narrowly approved by Electricite de France’s (EDF’s) board and then put on hold for further review by UK Prime Minister Theresa May in July, just hours before a large signing ceremony was due to take place. It was finally given the green light earlier in September after the government included a condition that it would be able to block the sale of EDF's controlling stake.

Two key contracts were signed during the ceremony – the contract for difference and the investor agreement. Clark said “Britain needs to upgrade its supplies of energy, and we have always been clear that nuclear power stations like Hinkley play an important part in ensuring our future low-carbon energy security.” Unions welcomed the development, saying the project would create thousands of skilled jobs. The first unit is currently expected to be commissioned in 2025-2026. Within hours of the main agreements being signed, Areva won subcontracts worth €5m ($5.6bn).

According to waste transfer contracts published on 29 September, EDF and CGN, will have to pay to decommission Hinkley, beginning in 2083. For the first time, the full costs of decommissioning and waste management associated with the plant are set aside during generation and are included in the price of the electricity, EDF said in a statement. The Hinkley decommissioning costs are estimated at GBP5.9-7.2bn and decommissioning activity will continue well into the 22nd century. The plant is expected to be fully decommissioned “from 2138” with disposal of the final used fuel. 

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