EDF chief: Hinkley Point will go ahead clearly and categorically

The head of EDF Energy has told MPs the Hinkley Point nuclear power project in the UK will go ahead “clearly and categorically”. Vincent de Rivaz quoted French Economy Minister Emmanuel […]

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By Priyanka Shrestha

The head of EDF Energy has told MPs the Hinkley Point nuclear power project in the UK will go ahead “clearly and categorically”.

Vincent de Rivaz quoted French Economy Minister Emmanuel Macron saying a final investment decision will be made in “early May” but said he “can’t give a precise date”.

He confirmed EDF has invested £2.4 billion so far on the project, which is running at £55 million a month.

“Nobody should doubt about our commitment to the project in which we have invested £2.4 billion,” he said.

Giving evidence to the Energy and Climate Change Committee, Mr de Rivaz added clearing regulatory and other hurdles has been a “long road” but insisted “everything is aligning at the moment and it is very positive”.

He told MPs: “I have said categorically this project will go ahead… I’m very pleased that people are so eager to see this final decision happening which is a good sign for the appetite of the project.

“We are working on solutions, they’re well identified, it’s a complex issue… Everybody is working on the final stage to make it happen as the French minister said it yesterday…. He said the project is absolutely critical and has the full support of the French Government.”

His comments come after the French utility’s Financial Director Thomas Piquemal resigned earlier this month.

Mr de Rivaz added the decommissioning is already being factored in the financial model, with a fund expected to collect contributions every year over the plant’s lifetime.

The controversial and long-delayed project, which will be the first nuclear power plant to be built in two decades, is expected to cost £18 billion and provide enough electricity for around five million homes.

Mr de Rivaz believes it is “economically fair” to consumers in the UK despite many arguing the strike price, agreed under the Contracts for Difference (CfD), is too high.

An artist's impression of Hinkley Point C. Image: EDF Energy
An artist’s impression of Hinkley Point C. Image: EDF Energy

 

In an earlier hearing, Simon Taylor, Lecturer in Finance, Judge Business School at Cambridge University, said Hinkley offers “poor value for money”. He added it is better if it is cancelled or renegotiated without jeopardising other nuclear projects.

He told MPs: “They would love to receive £92.50/MWh but doesn’t mean they should get it.”

While he believes new nuclear cannot be funded without some form of government support, Dr Taylor was “surprised” by the European Commission’s approval, adding the package is “quite generous”.

He insisted storage is a “fantastic market potential if we can crack it”.

Peter Atherton, Managing Director at investment banking firm Jefferies, who was also present at the first hearing, however said while storage is crucial, waiting for the day until it’s proven is “too risky”.

He believes Hinkley “is going to be gold” once operational: “It’s going to provide a lot of cash… 10% returns, at least £2 billion a year over 35 years.”

However he told the Committee: “The UK Government’s package is already very, very large. The CfD takes the entire power price risk from the project and puts it on the consumer for 45 years.

“We’re talking about a power station, not a Mars mission”, he said, adding a power station shouldn’t cost £20 billion.

Chinese company CGN, which has pledged £6 billion and was present during the second hearing, said it gives its “full commitment” to the project.

Zhu Minghong, General Director of UK Nuclear Projects at CGN told MPs: “We can commit not only investment but bring our expertise and experience we have over 20 years.”

Doug Parr, Policy Director at Greenpeace UK, who gave evidence at the first hearing, said the real costs of nuclear haven’t fallen in 50 years and believes there are “better, cheaper alternatives that can be deployed more quickly”.

EDF will be called back to be questioned if it fails to make a final investment decision by “early May”, ECC Chair Angus MacNeil MSP said.