Britain Close to EDF Nuclear Nuclear Power Plant Deal
The UK government and Electricite de France SA, better known as EDF energy, are close to announcing a deal that would see the French power-giant build and operate the country’s first new nuclear power stations since 1995.
Ed Davey, UK Energy and Climate Change Secretary, said: “We’re extremely close for a deal with EDF, and if and when we get that deal I’ll announce it to parliament and I think I’ll be able to show that it’s extremely good value for money for consumers.”
Talks between the UK and EDF are being seen as a test to see if there is a future for nuclear in Europe, at a time of lower natural-gas prices and sluggish economic growth. However, UK authorities have supported EDF’s proposal to build two nuclear reactors at Hinkley Point in Somerset, Southwest England, saying the country must modernise its power-generation capacity while curbing its carbon emissions. A Chinese company is also expected to take part in the project.
Prime Minister David Cameron says the Government’s plan is to diversify the energy sector as far as possible to maximise competition.
The two sides have now agreed on a “strike price”, the guaranteed price at which EDF would sell the power made from the reactor. The strike price has been one of the most elusive factors in negotiations, and while the British government sought somewhere between £80 and £85, EDF has been asking for about £95 per megawatt hour.
Davey says that foreign investment in the nuclear sector would not be limited to France: “It’s really possible that we’ll see massive Chinese investment, not just in nuclear but across the board, and I think we’ll see massive Japanese investment and Korean investment.”
He added that foreign companies would be subject to stringent British nuclear safety rules, and that “hundreds of billions of pounds” worth of investment was in the pipeline for Britain’s energy sector overall.
The UK government was thought to be on the verge of completing an agreement to revive nuclear power development in Britain, with a deal with French and Chinese companies.
Davey insisted there was no direct state aid being negotiated with EDF and China General Nuclear, but an announcement on the £14 billion EDF plant at Hinkley Point has still yet to be made, although it is thought it will be announced very soon in the wake of agreements with China.
Chancellor of the Exchequer George Osborne was in China this week signing a memorandum that would give China the go ahead for investment for nuclear plants at Hinkley Point.
Speaking about the partnership with China, Mr Osborne said: “It is an important potential part of the Government’s plan for developing the next generation of nuclear power in Britain. It means the potential of more investment and jobs in Britain, and lower long-term energy costs for consumers.”
EDF may be the main company behind the Hinkley Point project, but has been looking for partners to share the costs. Davey said: “This is an exciting development, strengthening our relationship with China in a way that will benefit both countries. Investment from Chinese companies in the UK electricity market is welcome, providing they can meet our stringent regulatory and safety requirements.”
A spokesman for the UK Department of Energy and Climate Change said that negotiations between the UK and EDF remain ongoing, but it won’t be long. The government hopes the Hinkley Point deal will provide the framework for other nuclear power projects that are currently under discussion.