UK government delays Hinkley decision
Hinkley has suffered a setback almost immediately, as the government delays a decision on whether or not to approve the £18 billion nuclear project until the autumn.
The board of energy giant EDF gave the go-ahead to its Hinkley new nuclear power plant yesterday (28 July), approving the project by 10 votes to seven.
The national media reported that, just hours later, business and energy secretary Greg Clark had released a statement announcing a delay to the government’s final decsion.
“The UK needs a reliable and secure energy supply and the government believes that nuclear energy is an important part of the mix,” he said. “The government will now consider carefully all the component parts of this project and make its decision in the early autumn.”
The Telegraph said both EDF and government sources had thought that ministers would sign off the subsidy deal for the plant today.
However, this is not the first time the project has suffered a setback. The project is now eight years behind schedule. The chief executive of EDF Energy Vincent de Rivaz infamously said Brits would be cooking their turkeys using power from Hinkley by the Christmas of 2017. It is now not expected to be up and running until 2025 at the earliest.
With an agreed strike price of £92.50/MWh, critics have questioned Hinkley’s value for money, particularly when the cost of renewable alternatives is falling fast.
There are concerns over EDF’s ability to finance the project through construction has been called into question. At the end of 2015 the company had net debts of £37.4 billion and, at £18 billion, the cost of building Hinkley is almost equal to the value of the entire company (£19.2 billion).
However, others say it represents “a major vote of confidence in the UK’s energy market”.
Upon the news of the go-ahead for Hinkley, EY head of power and utilities Tony Ward said: “Today’s announcement is the start of a process to replace some of the existing low carbon nuclear capacity that the UK has already closed, and more that will close in the years to come.”
This article first appeared on edie's sister title Utility Week