Britain May Pull Legal Plug On Hinkley Nuclear Plant

  • Date: 14/08/16
  • Danny Fortson, The Sunday Times

The fate of the new Hinkley Point nuclear plant could hinge on a little-known get-out clause that allows Theresa May to pull vital financial support if a similar plant in France is not running by 2020.

The new prime minister shocked Hinkley’s developers — France’s energy monopoly EDF and the Chinese state giant CGN — when she decided to postpone approval of the £18bn project just hours before it was expected to get the go-ahead last month.

EDF has been developing plans for Hinkley — the first atomic station in Britain for a generation — for nearly a decade. But soaring cost projections and delays have raised doubts about the Somerset plant, while there are concerns over giving a Chinese state entity a hand in key British infrastructure.

However, problems at a sister plant at Flamanville in northern France could give May added political and legal cover to scrap the deal.

Two years ago the EU approved a generous subsidy scheme that the government had agreed with EDF and CGN to underwrite the project. A key part of the deal was a Treasury guarantee for up to £17bn in loans.

The government imprimatur is vital because it would allow the debt-addled EDF to borrow on much cheaper terms. According to article 56 of the Brussels ruling, this guarantee was conditional on “objective evidence” that EDF’s reactor technology worked. This must be proven by Flamanville completing its “trial operation period” by the end of 2020.

Flamanville is using the same reactor design intended for Hinkley. Under construction since 2007, the French project has fallen years behind schedule and gone billions of euros over budget.

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