The long-running Hinkley Point C drama goes on. Before the champagne corks could pop in celebration of EDF making its final investment decision on the £18 billion nuclear power station, the government waded in to poop the party.
Almost immediately after the EDF board voted 10 to 7 in favour of the deal, the new energy and business secretary, Greg Clark, unveiled another delay to the project, pushing back the final, final decision until the autumn.
The saga began way back in 2005 when the Labour government under the leadership of Tony Blair launched an energy review, which culminated in renewed support for new nuclear, and ultimately the Hinkley Point C project.
However, this latest plot twist has arisen from the Brexit vote, which led to the departure of some the project’s leading supporters: notably former chancellor George Osborne and the entire Department of Energy and Climate Change.
Brexit appears to partly be behind Clark’s push back on the final decision. Another driver is said to be new prime minister Theresa May’s national security concerns about Chinese involvement in the deal (see more in Political Agenda, p8).
To many, a delay to allow further scrutiny of the deal is a sensible, rational decision and the only logical path for May’s government and the new Department for Business, Energy and Industrial Strategy (BEIS) to take. “I would commend the government for their decision to undertake the review,” energy and climate change select committee chair Angus MacNeil tells Utility Week.
The SNP MP, who is not a fan of the Hinkley project, says it is a “sensible move” that will enable the new energy team in BEIS to get to grips with the detail of the deal.
Others, including CBI deputy director general Joshua Hardie and CGN, which is partnering with EDF to build and fund the 3.2GW nuclear plant, have also expressed their understanding at the government seeking to familiarise itself before committing to the deal.
Nuclear Industry Association chief executive Tom Greatrex cautiously backed the government’s move, and highlighted Clark’s statement voicing support for new nuclear.
However, he did warn that if the delay extends beyond autumn, as the previous expected timeline of events would have put the EDF final investment decision, there could be danger to future energy projects, and to other UK infrastructure projects.
“If this period is prolonged, it is not just that this project will be undermined but everything in terms of infrastructure, due to a lack of confidence,” he says. “We need clarity as soon as possible.”
Labour shadow energy minister Barry Gardiner, on the other hand, slammed the government for the move, saying: “The Tories are in chaos.” He attacked the delay as “an appalling signal to send and a humiliating diplomatic move” following the vote to leave the EU.
The unions have taken a similarly hard line against the government. “Bewildering and bonkers” were the terms used by GMB national secretary for energy Justin Bowden, while Prospect deputy general secretary says the move is “incomprehensible”.
The fear is that investor confidence will be undermined in infrastructure projects across the UK as a whole, not because of the delay itself but because it was announced just moments after the fraught and “knife edge” decision to finance Hinkley was made by the EDF board.
MacNeil says the government has left EDF “red faced”, while Bowden says it could put at risk projects such as HS2 and the expansion of Gatwick or Heathrow.
The UK historically has a woeful record in backing big infrastructure projects, often hitting them with sudden U-turns or policy changes at critical moments. Recent major projects, such as the 2012 Olympics, HS1 and the Thames Tideway Tunnel, had begun to redress the balance.
The latest delay to Hinkley Point C, this time from Whitehall, could do severe damage to this partially restored reputation.
Hinkley Point C has so far proved to be a controversial and difficult project, plagued by delays and drama. Just when the final curtain appeared to be coming down with a decision being made, the government has unexpectedly decided to extend the saga’s run time. At least until the autumn.
“The UK needs a reliable and secure energy supply and the government believes nuclear energy is an important part of the mix. The government will now consider carefully all the component parts of this project and make its decision in the early autumn.”
“The UK needs a reliable and secure energy supply and the government believes nuclear energy is an important part of the mix. The government will now consider carefully all the component parts of this project and make its decision in the early autumn.”
Business and energy secretary Greg Clark
“Greg Clark has reiterated government support for new nuclear and it is understandable for the new team to take their time, we just need that period is as short as possible.”
NIA chief executive Tom Greatrex
“I would commend the government for their decision to undertake the review. I think it’s sensible to do that. However, in the board room there will be a lot of red faces.”
ECCC chair Angus MacNeil
“This delay could deter the investors… This is an appalling signal to send and a humiliating diplomatic move.”
Shadow energy secretary Barry Gardiner
“Theresa May’s decision to review the go-ahead on Hinkley Point C is bewildering and bonkers.”
GMB national secretary for energy Justin Bowden