The EDF Energy announcement in Paris on 28th July 2016 marked a new stage in the UK government’s long-running negotiations with EDF for a new nuclear plant in England.

The EDF board members were split on the vote, with 10 members voting for the £18 billion project for a new nuclear reactor at Hinkley, and one member walking out of the meeting. No sooner had EDF announced its decision when a new hurdle appeared. The new Secretary of State, Greg Clark declared that the government would consider all of the components of the ‘deal’ between EDF Energy and the UK government before committing fully.

The final government decision happened in the autumn of 2016.

EDF Energy required reassurance that the planned investment of £18 billion, and the costs of energy production, would be underpinned by continued government commitment to nuclear energy in the decades ahead. This raised many issues, not least of which was the cost to the public purse:

Can the cost of the UK subsidy for electricity generated by nuclear power can be justified?

Even now, almost a year later, opponents of the government’s approval of the deal suggest the Strategic Investment Agreement including the “Contract for Difference” (CfD) which sets a price for Hinkley Point C’s electricity of £92.50 per MWh for 35 years from 2025 onward, should be reviewed.

The French government’s intervention to purchase almost €3bn of shares in EDF as part of €4bn capital increase raised concerns when the agreement was reached.

By committing to the deal with EDF, the government signalled that it understands the associated investment that will be required, for skills training and nuclear research over the next 40 years. Will the government be willing to pay towards the expensive research that takes place at UK universities such as Oxford and Bristol?

What about the need for new skills, delivered by organisations such as the National Skills Academy Nuclear?

There will be an estimated workforce of 25,000 people required to build the new reactors and the 900 people to operate the new nuclear power station. Work is now underway at the Hinkley site.

It’s long been the policy of successive British governments to adopt the energy mix approach.  Can a relatively modest increase of 7% for electricity produced by Hinkley Point C warrant the huge budgets and risks involved?

The British public is not entirely convinced of nuclear safety following the disaster at Fukushima. The Green Party and others do not accept the case for nuclear energy at all. It added to a difficult judgement for Secretary of State for Business, Energy and Industrial Strategy. If costs rise as building work progresses and the public subsidy increases as a result, the combination of costs and safety concerns among the wider public could bring the issue of UK nuclear energy policy back into the forefront of British politics.


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