UK parliament scrutinises UK plans

26 March 2016

EDF Energy CEO Vincent de Rivaz told UK parliament's Energy and Climate Change Committee on 23 March that the Hinkley Point C nuclear project in the UK will "clearly and categorically" go ahead with a final investment decision at the beginning of May. He said: "It will go ahead because we have the expertise, the supply chain and our long-standing partners CGN [China General Nuclear]. We are confident in this project and in the EPR technology."

Although de Rivaz did not give a precise date, he noted that the French minister of the economy had said early May and "I agree that it will be very soon". EDF is working to secure the financial situation of the group as a whole for the next decade, he added. EDF has already invested GBP2.4bn ($3.4bn) in Hinkley Point C and is facing huge investment in existing nuclear in France, in networks and in overseas projects. He confirmed the total cost of construction at Hinkley Point will be GBP18bn. He said the company is in the final stage of negotiations with its major shareholder, the French government, which is why it was possible to propose early May as a date for a final decision. "It's a complex issue. Everybody is working in the final stage to make to happen. The project has the full support of the French and British governments."

He said the solutions being discussed are between the French government and EDF and there will be no impact on the British taxpayer "in any shape or form". Asked if the Hinkley Point contract for difference (CfD) represented a fair deal, de Rivaz said the CfD has been scrutinised and challenged in the UK and in Brussels. He said the CfD is commensurate with the need to attract investors in a world where taxpayers will not contribute to the construction of nuclear plants. The CfD is a guarantee from the UK government to EDF Energy on the price of electricity to be produced by the planned reactors.

Zhu Minhong, general manager of international nuclear business development department and general director of UK nuclear projects at CGN said CGN was fully committed to Hinkley Point C. "We have made huge progress and our discussions are almost complete. From CGN's side we are confident to say this project will go ahead."

Earlier in March, the European Commission approved the partnership between EDF and CGN for the development, construction and operation of three new nuclear power plants in the UK. Under the Strategic Investment Agreement signed last October, CGN agreed to take a 33.5% stake in the HPC project, as well jointly develop new nuclear power plants at Sizewell in Suffolk and Bradwell in Essex.

The parliamentary committee also heard from Tom Samson, CEO of NuGeneration (NuGen), and Alan Raymant, COO of Horizon Nuclear Power, who said they were learning from EDF Energy's experience with Hinkley. Samson said the UK's nuclear new build industry is "larger than just Hinkley" and that NuGen "understands the need" for the country to bring online 18MWe of new capacity in the mid-2020s.

NuGen - a 60%/40% joint venture between Toshiba and GDF Suez - in 2014 confirmed plans to build three Westinghouse AP1000 pressurized water reactors with a total capacity of 3.4 GWe at Moorside in northwest England by the end of 2026. The first unit is expected to begin operating by the end of 2024. A final investment decision is expected by the end of 2018. However, the UK's Office for Nuclear Regulation said in January that there had been some programme "slippage" in a number of topic areas for the generic design acceptance (GDA) of the AP1000 nuclear reactor design.

In a company statement following the Committee meeting, Samson said: "It is no secret that financing these internationally-significant projects, which have huge up-front costs, is a major challenge - it is complicated, but not impossible. He told MPs that the company was confident EDF would achieve an investment decision soon and that it was "keen for that to happen". However, postponements to that decision on Hinkley are "not a barrier" to NuGen's progress with its Moorside project, he added. NuGen's aim to reach a decision by the end of 2018 is a "realistic path", he said.

Raymant said that, like NuGen, Horizon "is not dependent" on the progress of Hinkley, adding, "We are bringing tried and tested technology". Horizon Nuclear Power, a 100% subsidiary of Hitachi Ltd, plans to deploy the UK Advanced Boiling Water Reactor (ABWR) at two sites - Wylfa Newydd on the Isle of Anglesey, and Oldbury-on-Severn in South Gloucestershire. Hitachi-GE Nuclear Energy in November last year reached a regulatory milestone in its progress towards deployment of the UK ABWR, following confirmation that British regulators will move to the final step of the GDA. The GDA process for the UK ABWR is on schedule for completion by the end of 2017.

Hitachi "has made huge investment in the project already", he said, but Horizon will be looking for "the widest pool of investors" to support the project. "Our target is to get to a final investment decision in early 2019," he said.



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