UK government delays decision on major nuclear power project

The UK government has delayed its decision on whether to proceed with building its first new nuclear power station for 20 years, provoking surprise from industry groups and trade unions alike.

Paragraph entered by Atlantic migration, in order for SteelFirst articles to display correctly on Metal Bulletin.

Newly-appointed UK Business and Energy Secretary, Greg Clark, announced late on Thursday July 28 that the government would review the project and would postpone its decision to September.

Earlier in the evening, the project to build two nuclear reactors at Hinkley Point, south-west England, was given final approval from major financier Energie de France (EDF) following a tightly-contested boardroom vote.

“The two [European Pressurised Reactors (EPRs)] at Hinkley Point will strengthen EDF’s presence in [the UK], where its subsidiary, EDF Energy, already operates 15 nuclear reactors and is the largest electricity supplier by volume,” the company said at the time on Thursday.

However, an EDF spokeswoman told Steel First on Friday that the company would not comment on the government’s subsequent announcement to postpone its final decision on the project.

It has since released a list of comments from figures involved in the nuclear industry in support of constructing the new power plant.

The decision comes weeks after former UK prime minister David Cameron resigned in the aftermath of a referendum where the UK voted to leave the EU – a decision known as Brexit.

The new prime minister, Theresa May's, decision to review the project could indicate that the new government is wary that involvement from China General Nuclear (CGN) in the project could mean China would be able to “shut down Britain’s energy production at will”, UK business newspaper the Financial Times said on Friday.

Reaction to the decision
UK trade unions and nuclear industry representatives reacted with surprise to the development.

“Theresa May’s decision to review the go-ahead on Hinkley Point C is bewildering and bonkers. After years of procrastination, what is required is decisive action, not dithering and more delay,” UK nuclear industry workers trade union GMB said on Friday.

“This unnecessary hesitation is putting finance for the project in doubt and 25,000 new jobs at risk immediately after Brexit. It is a gross error of judgement and must be reversed,” it added.

“We now need the new ministers to quickly endorse the decision to show they are serious about industrial strategy,” Tom Greatrex, ceo of the Nuclear Industry Assn (NIA), said on Friday.

“The Government’s decision to take longer to look at the contract does not change the fundamentals – that by 2030, two thirds of our electricity generation capacity will have retired, and we need to replace it with low carbon and reliable power for the future,” he continued.

The project’s criticism and controversy

When fully operational, the plant will be able to produce 7% of the UK’s electricity supply, which would be enough to power 6 million homes for 65 years, according to UK government documents.

But despite this large output, and its potential to provide several thousand jobs, some are highly critical of the project.

One major criticism concerns the high costs involved with the undertaking.

Alongside up-front investment from EDF and CGN, the UK government would subsidise the project at a cost of £36.96 billion ($48.72 billion) over the plant’s lifetime, according to government documents.

Electricity from the project was agreed at an initial strike price of £92.50 ($121.93) per MWh, the government said in October 2015.

This is almost three times the standard wholesale rate of £34.76 ($45.82) per MWh for electricity which was assessed by UK gas and electricity markets regulator, Ofgem, on March 1 2016.

“Countless experts have warned that for British families this power station will be terrible value for money,” environmental activist group Greenpeace, which launched a petition opposing the project earlier this year, said yesterday.

“While Hinkley continues to suffer huge delays, and serious questions are being raised about the safety of the reactor, the cost of renewable energy is falling,” the group said previously when announcing the petition.

Meanwhile, EDF board member, Gerard Magnin, resigned from his position on Thursday following the vote to approve the Hinkley Point undertaking.

Magnin criticised the inflexibility and “vulnerability” of nuclear power, comparing it to EDF “putting all of its eggs in the same basket” in a letter to the ceo published by French newspaper Le Monde on the same day.

“Let’s hope that Hinkley Point will not drag EDF into the same abyss as [French nuclear energy specialist] Areva,” Magnin added in the letter.

Should the building of the nuclear reactors go ahead, 80% of the steel forgings for the project could be provided by independent UK steelmaker Sheffield Forgemasters, the company’s md, Graham Honeymann, said in January.

Meanwhile, French steel tube and pipe maker Vallourec has previously provided replacement tubes for the steam generators of EDF-owned nuclear reactors in France.

Recent Base Metals News

Editor's pick