Construction on EDF's Hinkley Point nuclear plant to begin "within weeks" after China deal is announced

 
Jessica Morris
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The site will provide enough energy to power six million homes (Source: Getty)

Construction on the UK's first nuclear power plant in a generation could begin "within weeks" after a multi-billion pound deal between France's EDF and China General Nuclear Power Corporation.

EDF will take a 66.5 per cent stake in Hinkley Point C in Somerset, while China General Nuclear Corporation will take 33.5 per cent.

EDF intends to bring other investors into the Hinkley Point project in due course, but without reducing its stake in the project to below 50 per cent.

The deal was signed the presence of the Chinese President, Xi Jinping, and the Prime Minister, David Cameron, in London.

"I am confident that our experience and ability mean we will successfully deliver Hinkley Point C and subsequent projects. We are planning for a final investment decision within weeks so that we can move forward with construction," EDF chairman, Jean-Bernard Lévy, said.

Total construction costs are estimated at £18bn, less than the £24.5bn previously projected by the European Commission, while it's start date was pushed back another two years to 2025.

Peter Atherton, a managing director and leading utility analyst with Jefferies investment bank, told City A.M. that Hinkley Point is likely to be completed on time and on budget because "they've given themselves a big budget and a long time to build it".

"It's still a colossally expensive project," Atherton added.

The two companies also laid the groundwork for the joint development of new nuclear power stations at Sizewell in Suffolk and Bradwell in Essex.

The project will provide low carbon electricity to six million homes for around 60 years, creating 25,000 jobs, up to 1,000 apprentices and billions of pounds worth of supply chain contracts.

But it has come under fire over its value to the taxpayer, as the government has agreed a “strike price” of £92.5 per megawatt hour for its output, which is about twice the current market price.

"We are tackling a legacy of under-investment and building energy infrastructure fit for the 21st century as part of our plan to provide the clean, affordable and secure energy that hardworking families and businesses across the country can rely on now and in the future," energy secretary, Amber Rudd, said.

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