UK greenlights £18bn nuclear project Hinkley Point
| FlashRatings | Thursday, September 15, 2016 2:33 PM EDT
The U.K. government gave it’s green-light Thursday for the construction of the Hinkley Point C nuclear plant in Southern England.
The plant is slated to cost £18 billion ($23.8 billion) and could provide as much as 7 percent of the country’s electricity needs.
The decision to move forward with the project comes after years of delays and negotiations between the UK government and Eléctricité de France (EDF), the French nuclear firm that will build the project.
EDF will receive a guaranteed energy price of £92.50 per megawatt hour for the electricity produced by Hinkley Point, to be adjusted for inflation, during 35 years.
The project has faced opposition on many fronts: from environmental groups who oppose the presence of more nuclear in the UK’s “energy mix”, to critics who say the guaranteed price is too high to make sense, to powerful French labor unions who have vehemently opposed taking on the project.
Hinkley Point C will use a new generation of nuclear reactors that proponents say is so stable it could withstand being hit by an airplane. But nuclear plants under construction in France and Finland using the new technology have faced massive budget overruns and multi-year delays.
Britain’s new prime minister, Theresa May frustrated partners in July by moving to postpone the UK’s decision on the deal just hours before representatives from the Chinese minority investor CGN were meant to fly to England for a signing ceremony.
“I have just become prime minister,” May told French President Hollande at the time, according to the Financial Times. “It is my method.”
“Britain needs to upgrade its supplies of energy, and we have always been clear that nuclear is an important part of ensuring our future low-carbon energy security.” Said Greg Clark, UK Secretary of State for Business, Energy and Industrial Strategy, in a statement today. “Having thoroughly reviewed the proposal for Hinkley Point C, we will introduce a series of measures to enhance security and will ensure Hinkley cannot change hands without the Government’s agreement.”
The UK and France first announced that they would collaborate on the construction of new nuclear plants in 2008.