Acclaim as UK’s first nuclear power plant in a generation is unveiled

David Cameron delivers a speech to workers in the Charge Hall at Hinkley Point B in Somerset.David Cameron delivers a speech to workers in the Charge Hall at Hinkley Point B in Somerset.
David Cameron delivers a speech to workers in the Charge Hall at Hinkley Point B in Somerset.
BRITAIN’S first new nuclear power station in a generation is to be built under a £16 billion project which will create thousands of new jobs.

The move followed an agreement between the Government and French-owned EDF Energy, which will see Hinkley Point C in Somerset begin operating in 2023.

Ministers, business leaders and unions welcomed the development as a huge boost for the economy, although environmental campaigners warned the new site will distort energy policy by displacing newer, cleaner, technologies that are dropping “dramatically” in price.

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Shortly after the go-ahead for Hinkley was announced, energy giant RWE npower heaped fresh pressure on households by hiking electricity and gas prices by 9.3% and 11.1% respectively from December 1.

Nigel Cann site director of Hinkley Point C, Energy Secretary  Ed Davey, Prime Minister David Cameron, Vincent de Rivaz, Chief Executive of EDF (Electricite de France) and Henri Proglio, CEO and Chairman of EDF examine site plans for the news Hinkly C nuclear power station at Hinkley Point, Somerset.Nigel Cann site director of Hinkley Point C, Energy Secretary  Ed Davey, Prime Minister David Cameron, Vincent de Rivaz, Chief Executive of EDF (Electricite de France) and Henri Proglio, CEO and Chairman of EDF examine site plans for the news Hinkly C nuclear power station at Hinkley Point, Somerset.
Nigel Cann site director of Hinkley Point C, Energy Secretary Ed Davey, Prime Minister David Cameron, Vincent de Rivaz, Chief Executive of EDF (Electricite de France) and Henri Proglio, CEO and Chairman of EDF examine site plans for the news Hinkly C nuclear power station at Hinkley Point, Somerset.

The 10% average bill increase will affect about 3.1 million customers, the group said, and follows recent price hikes by British Gas and SSE.

Ministers faced criticism over the £92.50 per megawatt hour that will be paid for electricity produced at Hinkley - around double the current market rate.

The so-called ‘strike price’ could fall by £3 if EDF goes ahead with proposals to build two reactors at Sizewell in Suffolk.

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The contract is due to run for 35 years, with the electric price increasing annually in line with CPI inflation. At full capacity the two reactors could provide up to 7% of the country’s energy needs.

China General Nuclear Power Group and China National Nuclear Corporation will be investing between 35% and 40% in the scheme, EDF between 45% and 50% and Areva 10%, while discussions are taking place with a shortlist of other interested parties who could take up to 15%.

Preliminary works for the project are already said to be well advanced, and subject to a final investment decision by July next year, the power station is expected to complete commissioning of the first unit in 2023.

EDF said 57% of the project’s construction value could be spent in the UK, while 25,000 jobs will be created in the UK during the construction phase, including 400 apprentices, with 900 jobs when the site is operational.

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Energy Secretary Ed Davey insisted he had secured “good value” following more than a year of intense negotiations. The project will cut the UK’s carbon emissions by nine million tonnes a year, and create thousands of jobs.

“We think it would be good value if (the strike price) was a little higher,” the Liberal Democrat Cabinet minister said.

“I was determined to get them below £90 so I could prove to everybody we had got a good deal.

“What has driven a tougher deal is the fact that I made clear we could walk away from the table. We had other nuclear options. We have got an early start on our long-term energy needs.”

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Mr Davey stressed that the construction risks were being borne by the companies, and the Government would not be on the hook for any overspends.

However, if costs fell, the taxpayer would share in the savings.

All decommissioning and waste management costs are also included in the deal, he said.

The initial commercial agreement is not legally binding until EU clearance has been secured for the state aid. A final contract is expected to be signed next year.

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Prime Minister David Cameron said: “As part of our plan to help Britain succeed, after months of negotiation, today we have a deal for the first nuclear power station in a generation to be built in Britain.

“This deal means £16 billion of investment coming into the country and the creation of 25,000 jobs, which is brilliant news for the South West and for the country as a whole.

“As we compete in the tough global race, this underlines the confidence there is in Britain and makes clear that we are very much open for business.

“This also marks the next generation of nuclear power in Britain, which has an important part to play in contributing to our future energy needs and our longer term security of supply.”

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EDF group chairman and chief executive Henri Proglio said: “The agreement in principle reached today with the British Government significantly strengthens the industrial and energy co-operation between France and the United Kingdom.

“The EPR project at Hinkley Point represents a great opportunity for the French nuclear industry in a context of a renewal of competencies.

“This project will deliver a boost to the economy and create job opportunities on both sides of the Channel and will enable the United Kingdom, a country in which EDF is already the leading producer of electricity, to increase the share of carbon-free energy in its production mix.”

EDF Energy chief executive officer Vincent de Rivaz said: “What we are announcing today is a good, fair and balanced deal for consumers, the UK and EDF.

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“The project will kick-start the UK nuclear programme and will help rebuild the nation’s industrial stamina.

“The progress so far on the project reflects the great skill and determination of a world-class team which is ready to get to work and turn Hinkley Point C into a reality.”

Hinkley Point C will be the first new nuclear power station to be built since Sizewell B, which started generating electricity in 1995.

The Government said building a new fleet of nuclear power stations could reduce bills by more than £75 a year in 2030.

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Shadow energy secretary Caroline Flint claimed the deal put the Prime Minister in a “ridiculous” position.

She said: “Labour supports the development of new nuclear power stations in Britain as part of a balanced, secure and clean energy mix.

“The potential costs of this agreement make it all the more crucial that we end the rip-offs and have an energy market that people trust.

“Labour will freeze energy bills through to the start of 2017 while we reset the energy market to make it more competitive, transparent and fair for consumers.”

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Unite union national officer Kevin Coyne said: “At last the Government has provided the stability and certainty the UK needs to begin to meet the huge energy challenge facing us.

“The go-ahead at Hinkley Point will deliver thousands of skilled jobs in construction, manufacturing and the operation of the power station.

“The deal will hopefully pave the way for more power stations which will in turn generate more skilled jobs.”

Which? executive director Richard Lloyd called for the deal to include a clause which would trigger a refund to consumers if it turns out that the Government has overpaid.

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“Rising energy bills are one of the top concerns for cash-strapped consumers, so everyone will want to be assured that the price the Government has agreed for new nuclear power is fair,” he said.

Greenpeace UK executive director John Sauven said: “Hinkley C fails every test - economic, consumer, and environmental.

“It will lock a generation of consumers into higher energy bills via a strike price that’s nearly double the current price of electricity, and it will distort energy policy by displacing newer, cleaner, technologies that are dropping dramatically in price.”

John Longworth, director general of the British Chambers of Commerce, said: “After months of uncertainty, British business will be pleased that negotiations for the UK’s first new nuclear power plant in decades have been successfully concluded.”

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John Cridland, director general of the CBI, said: “This is a landmark deal which will help us meet our future energy challenges, while boosting jobs and growth.”

Construction union Ucatt said Hinkley Point will become the best-paid building project the industry has seen, with workers receiving basic pay of £13 an hour.

Clear rules have also been agreed for a bonus scheme, productivity and “milestone” payments, as well as “significant” pension contributions, said the union.

General secretary Steve Murphy said: “This agreement provides excellent employment conditions and industrial relations for workers. Ucatt will be using this agreement as a template for future projects in order to ensure that its provisions become standard throughout the industry.”

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Gareth Stace, of the manufacturers’ organisation EEF, said: “It is good news for the security of our energy supply that progress is finally being made on developing extra capacity. However, the focus in the coming weeks must now be on the competitiveness of electricity prices and the need to avoid cost increases that are out of line with our competitors.”

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