The long-awaited final signing of the agreement to build a new nuclear plant at Hinkley Point, in southwest England, has come after huge problems financing the deal and major safety issues associated with two other new nuclear plants using the same design.
Two power stations based on the same design as that proposed at Hinkley, in Flamanville, France and Olkiluoto, Finland, have been beset with technical difficulties and are both over budget.
EDF has been struggling to get building underway at Hinkley Point because the sheer cost of building the plant has been a major sticking point, with British taxpayers being forced to back the deal by providing a guaranteed price of generated electricity from the plant.
EDF Energy — the UK subsidiary of EDF — agreed a "strike price" with the UK Government, which guarantees EDF a price of US$141 MWh for generating electricity over 35 years, as well as a debt guarantee.
In 2015, EDF's construction partner, Areva, announced huge losses and the French Government is attempting a rescue plan that will include a bailout from EDF. This in turn, had a knock-on to Hinkley, as EDF was unable to finance the whole deal. Cameron persuaded the Chinese Government to allow the China General Nuclear Power Corporation (CGN) to pay a third of the cost of the US$25 billion project in exchange for a 33.5 percent stake.
The Hinkley deal had been given the green light by former prime minister David Cameron.
However, on taking office, new PM Theresa May put the plans on hold, allegedly because of security fears. It is rumored May was spooked by the idea of China having such close access to Britain's national infrastructure, amid fear of nuclear secrets being accessed by Beijing and second thoughts over allowing China to build another plant at Bradwell in the east of England.
Seven weeks after the delay, May gave the go-ahead to the power station, after advances from both Beijing and Paris. During a signing ceremony in London, the Secretary of State for Business, Energy and Industrial Strategy, Greg Clark, the Chairman and CEO of EDF, Jean-Bernard Levy and the Chairman of CGN, He Yu, signed the final documentation to enable Hinkley Point C to go-ahead.
Clark said: "Signing the Contract for Difference for Hinkley Point C is a crucial moment in the UK's first new nuclear power station for a generation and follows new measures put in place by Government to strengthen security and ownership.
"Britain needs to upgrade its supplies of energy, and we have always been clear that nuclear power stations like Hinkley play an important part in ensuring our future low-carbon energy security."
Hinkley will provide seven percent of Britain's electricity needs for sixty years. UK-based businesses will benefit from more than 60% of the US$25 billion value of the project and 26,000 jobs and apprenticeships will be created.