Sunday 14 August 2016 10:17 pm

UK government could fall back on get-out clause for Hinkley

A get-out clause could let Prime Minister Theresa May withdraw crucial funding for the controversial Hinkley Point C nuclear power plant project if she chose to use it.

May recently kicked backed the government’s decision on the £18bn project — reportedly due to security concerns regarding Chinese investment. There are fears that its complete abandonment would spark a diplomatic row.

Read more: The Hinkley Point C nuclear reactor shouldn't be delayed – it should be scrapped

Paul Dorfman, a senior lecturer at the UCL energy institute, told City A.M.: "Unless [Hinkley's sister project in] Flamanville comes online on time the UK government has a clear get-out clause for not going ahead with … Hinkley."

The Times newspaper reported that a government guarantee for up to £17bn in loans towards the project is conditional on evidence that EDF's technology works. Consequently Flamanville, which uses the same EPR nuclear reactor design, must complete its "trial operation period" by the end of 2020.

France's nuclear watchdog, the ASN, recently found "anomalies" in Flamanville's steel reactor vessel. A worse case scenario would result in it being forced to dismantle the vessel and start again, meaning it would miss the 2020 deadline.

Read more: China ambassador warns over “crucial historical juncture” in UK relations

EDF’s Flamanville project is already delayed and billions over budget.

The department for business and industrial strategy said: "The government is now considering carefully all the component parts of this project and will make its decision in the early autumn."

China’s ambassador to the UK warned last week that the unexpected delay had bought the two nations relations to a “historical juncture”. He said he hoped the UK government would “continue to support Hinkley”.