U.K. Government Delays Decision on Hinkley Point Nuclear Project
July 29 2016 - 5:15AM
Dow Jones News
By Selina Williams in London and Inti Landauro in Paris
Plans to build the first new nuclear plant in the U.K. in a
generation were unexpectedly delayed after the government postponed
making a final decision on the controversial GBP18 billion ($23.7
billion) project until the fall.
The news came late Thursday just hours after French
state-controlled power utility Electricité de France SA's board
voted to approve the project at Hinkley Point in Somerset,
southwest England.
"The government will now consider carefully all the component
parts of this project and make its decision in the early autumn,"
U.K. Business and Energy Secretary Greg Clark said.
EDF had expected to sign contracts to build two nuclear reactors
on Friday.
The project has proved controversial in both France and the
U.K., with some senior EDF officials and labor unions worried about
its impact on the company's finances, while some politicians and
environment groups in the U.K. consider it too expensive and
risky.
The six labor-union representatives sitting on EDF's 18-member
board have repeatedly opposed the project. Another board member,
Gerard Magnin, resigned moments before the vote. According to Le
Monde newspaper, he quit in opposition to the project. His
departure follows the resignation earlier this year of the
company's Chief Financial Officer Thomas Piquemal over the
project.
Even though the U.K. government guaranteed EDF and its Chinese
partner a price for the electricity generated by the reactors
significantly above market levels, unions and several company
officials have said the costs will saddle EDF with too much
debt.
In the U.K., the guaranteed electricity price of GBP92.50 a
megawatt hour for the 35 years has been criticized. The level is
more than double the current wholesale power price in the U.K.
Concerns have also been raised that two other projects in Europe
using the same reactor technology are years behind schedule and
billions over budget.
The French government has backed the project and announced a
cash injection of EUR3 billion ($3.3 billion) in EDF to help the
company develop the project, which would lead to job creation in
France and buoy beleaguered state-owned nuclear firm Areva SA,
which manufactures nuclear reactors.
Write to Selina Williams at selina.williams@wsj.com and Inti
Landauro at inti.landauro@wsj.com
(END) Dow Jones Newswires
July 29, 2016 05:00 ET (09:00 GMT)
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