Read more: The folly of Hinkley
The case for new nuclear in the UK remains that it is a proven and reliable source of zero carbon electricity, which also avoids dependence on imported gas. The case against Hinkley remains that it is simply too expensive. The National Audit Office estimated in July that the 35 year £92.50/MWh contract price would cost the public purse £29.7bn more than having an equivalent amount of gas-generated electricity capacity.And yet, after an unexpected review of the new £18bn Hinkley Point C nuclear power station, the government has approved the project, which will be financed by the French state-owned company EDF (two thirds) and the Chinese state-owned company CGN (one third). Assuming that the project now actually proceeds, it will be the first new nuclear power station to be built in the UK since 1995.
Greg Clark, the Energy Secretary, attached two conditions. First, changes in ownership of the project would be subject to government approval and government will retain the capability to prevent the future nuclear projects passing into unapproved hands. Second there will be a review of the security implications of foreign ownership of critical infrastructure.
These conditions are unlikely to affect either Hinkley or the other new nuclear projects in the pipeline. There are very few nuclear power operators in the world and none of them would ever try to acquire British assets without the approval of No 10. The contenders are either American (currently uninterested in foreign investment), Japanese (actively developing projects in the UK), Chinese (likewise), Korean (reportedly joining a Japanese-led project in Cumbria) and Russian (persona non grata).
A lot of other British infrastructure is owned by American, French, German and Hong Kong based companies, with no apparent controversy.
EDF’s July board decision to proceed with the European Pressurised Reactor (EPR) at Hinkley has been challenged by union board members. The odds are that EDF will press ahead, because the French government, which owns 85 per cent of the shares, needs Hinkley to keep the French nuclear industry alive.
CGN’s interest is not confined to Hinkley. It also wants to build a Hualong type reactor at Bradwell in Essex. China, which will soon pass France as the largest nuclear power nation, has invested heavily in reactor development, building on Japanese, US, French and Russian designs, which it has licensed and then “localised.” Hualong, which means “Chinese dragon,” could offer safe, up-to-date technology at acceptable cost. It it succeeds and Bradwell is a success, then China would have a big export market in nuclear know-how.
But Hualong is unproven, and two other recent, ambitious designs—the French European Pressurised Reactor (EPR) and Japanese-US AP1000 reactors—have so far failed to live up to initial hopes. The first Hualong station is under construction in southern China and is scheduled to be completed in about five years (much faster than Hinkley).
Prime Minister Theresa May was suspected of having doubts about the security of a Chinese investment in the British electricity industry. But Bradwell would amount to less than 5 per cent of total electricity capacity so even a hostile switching off of the station would be well within the National Grid’s operational tolerance.
The new agreement makes no mention of any obstacles for the Bradwell project. CGN will now submit its reactor plans to the Office of Nuclear Regulation (ONR) for approval. This is a one-off examination of the reactor type, after which additional reactors can be built subject only to local planning permission. This is no small hurdle for a nuclear power station, but ONR approval means that further reactors are not subject to a long and costly inquiry before construction can begin. The process is likely to take five years.
The ONR must also be satisfied that the Chinese company is a competent nuclear operator, and this will be a test of transparency for the Chinese. Nuclear data is shared freely among members of the International Atomic Energy Agency and the World Association of Nuclear Operators. China is a member of both. The earliest date at which the construction of Bradwell could start is therefore 2021.
EDF has spent over £2bn on Hinkley, on civil engineering works and personnel. Hinkley’s sister station, the Flamanville C EPR in Normandy, is not only several years behind schedule and around three times over budget, but has a problem with its pressure vessel (the inner containment for the reactor) which is being investigated by the French nuclear regulator.
The good news is that the problem has not occurred in the other EPR reactor, which is under construction in China, and is scheduled to come online in 2017. This suggests that the problem with the French plant is a manufacturing defect rather than a design flaw.
The bad news is that Hinkley will be built using the same French-based manufacturing chain as Flamanville C, so even a manufacturing problem is worrying. A normal company would wait until Flamanville C were fully proven and commissioned. But EDF is not a normal company.
