Hinkley Point - A Financially Radioactive Deal?
The Daily Telegraph reports that EDF said yesterday that a final investment decision on the proposed Hinkley Point nuclear plant is ‘very close’ as it posted a 68% drop in net profits and announced a cut in its dividend. The firm disclosed that an agreement had yet to be reached with Chinese state nuclear corporation CGN, which is due to take a one-third stake in the project. EDF group chief executive Jean-Bernard Levy also disclosed that work on the nuclear plant proper would not begin until 2019. Of EDF’s present UK fleet of eight nuclear power stations, the life of four will be extended, the firm said. The closure dates of Heysham 1 and Hartlepool will be extended from 2019 to 2024, while Heysham 2 and Torness will see closures dates extended from 2023 to 2030. EDF said the continued running of the plants, notwithstanding the lifespan extensions, would depend on the continuation of two key UK government policies – the carbon tax and the capacity market – which provide financial support for the reactors.
The Daily Telegraph is sceptical, remarking that the lifespan extensions are ‘evidence more of uncertainty than of design’, while EDF’s assurances that Hinkley Point’s construction phase will be launched soon have been heard before. Some would argue that such a major project, central to our energy security, should have been taken on by Britain, not delegated to two other states. Commenting for The Times, Alistair Osborne remarks that a ‘last-century grand project like Hinkley’ would be far cheaper if we built it ourselves using historically low borrowing costs and then regulate the operator’s returns. Instead, Britain is planning to enrich EDF. ‘Why are we signed up to such a financially radioactive deal?’ asks Osborne.