The UK government said today it would proceed with the country’s first new nuclear power station for a generation, to be built and operated by a French-Chinese consortium at Hinkley Point in Somerset.
But it has changed the agreement’s legal framework in the interests of national security.
Prime Minister Theresa May approved the $23.7bn (£18bn) project after putting it under a surprise review when she took office in July. In certain quarters China’s involvement in the scheme had raised concerns over national security.
We will introduce a series of measures to enhance security and will ensure Hinkley cannot change hands without the Government’s agreement– Greg Clark, UK Secretary of State for Business, Energy and Industrial Strategy
New conditions on the controversial agreement with the state-owned firms building the plant – France’s EDF and China’s China General Nuclear Power (CGN) – mean the UK government will be able to prevent the sale of EDF’s controlling stake prior to the completion of construction.
The new legal framework will mean that "significant stakes cannot be sold without the Government’s knowledge or consent", the government said in a statement, adding that it will allow ministers to "take action to protect national security as a result of a change in ownership".
Reforms to government’s approach to foreign ownership of "critical infrastructure" are also promised.
"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," said Greg Clark, Secretary of State for Business, Energy and Industrial Strategy. "Consequently, we have decided to proceed with the first new nuclear power station for a generation."
He added: "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."
Under a deal worked out in October last year, EDF will take a two-thirds stake in the twin-reactor Hinkley Point C power station, while China’s CGN will take a third. EDF says construction will take 10 years.
The cost and risk of building and operating the plant will be borne by EDF and CGN, but the government has guaranteed to buy the electricity for £92.50 per megawatt hour for 35 years, which is around twice the current wholesale electricity price.
Consumers will bear this cost. Critics label this a subsidy.
Hinkley Point C will provide 7% of Britain’s electricity needs for sixty years.
Government says UK-based businesses will benefit from more than 60% of the £18 billion value of the project, and 26,000 jobs and apprenticeships will be created.
Currently, the UK has eight nuclear power stations which generate around 20% of the country’s power. Almost all of these are due to close by 2030.
Image: Artist’s rendition of the planned twin-reactor nuclear plant, Hinkley Point C (EDF)