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World’s largest nuclear project, UK’s Hinkley Point C, now in doubt

Hinkley planBritain casts doubt on EDF’s $24 billion nuclear project, Reuters LONDON | BY NINA CHESTNEY AND WILLIAM SCHOMBERG, 29 July 16   Britain has cast doubt on a $24 billion (18 billion pounds) project with French utility EDF to build the UK’s first new nuclear plant in decades, delaying a final decision on the plan just weeks after the Brexit vote ushered in a new prime minister.

The surprise decision to review the Hinkley Point C project was made public hours after the board of French state-controlled EDF voted to proceed with it.

The British government, which had been expected to sign contracts on Friday, said instead that it wanted to give the plans further consideration, postponing its verdict until early autumn.

The review came little more than a month after Britons voted to leave the EU in a referendum that forced the resignation of Prime Minister David Cameron – whose administration gave the initial go-ahead to the project – and the accession of Theresa May.

The vote, and the resulting economic uncertainty, threw doubt on the future of major British infrastructure projects, including the nuclear plant……..

Analysts and unions said the review under new Prime Minister May would likely delay the project further……..

Although EDF and Chinese partner China General Nuclear are responsible for the 18-billion-pound ($24 billion) cost of the project, Britain has committed to pay a minimum price for the power generated by the plant for 35 years.

Critics, including some British lawmakers and academics, say the country would be overpaying at that minimum price, which equates to double current market levels.

“Because of the fall in the energy price over the past 12 months, the project does look very expensive and there have been a lot of calls for other projects to be considered or for this to be taken back to the drawing board,” said Oliver Salvesen, analyst at investment bank Jefferies………

The British review could lead to increased resistance in France to the project, which was only narrowly approved by the EDF board on Thursday……

If the project goes ahead after the government’s review, the plant would not come online until the 2030s, industry experts estimate.  EDF will still have to shoulder the costs of the long construction phase during which the investment will not generate any cash flow, which is credit negative for the firm, said Paul Marty, vice president and senior credit officer at Moody’s……..http://uk.reuters.com/article/uk-edf-britain-nuclear-idUKKCN1090EW

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July 30, 2016 - Posted by | politics, UK

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