Hinkley nuclear deal will go ahead, Govt says

Theresa May finally agrees on Hinkley but critics say it is not a good deal for UK taxpayers and was simply "too big to fail".

The Hinkley nuclear power station deal will go ahead after months of doubt, the Government has announced - but there will be new conditions.

A "new agreement" has been reached with French energy firm EDF which the Government says guarantees "significant new safeguards" for foreign investment in critical infrastructure.

It stipulates EDF must remain controlling partner in the £18bn project during the construction phase - and the Government will be able to intervene in the sale of EDF's stake once the plant is built.

This follows national security concerns over Chinese involvement in the project that are understood to have prompted Theresa May to put the brakes on the deal at the beginning of the summer.

The Hinkley C plant in Somerset is to be built by EDF but a third of the cost will be put up by the China General Nuclear Power Corporation (CGN) - which today said it was "delighted" at the decision.

Greg Clark, Secretary of State for Business, Energy and Industrial Strategy, said: "Having thoroughly reviewed the proposal for Hinkley Point C, we will introduce a series of measures to enhance security and will ensure Hinkley cannot change hands without the Government's agreement.

"Consequently, we have decided to proceed with the first new nuclear power station for a generation.

"Britain needs to upgrade its supplies of energy and we have always been clear that nuclear is an important part of ensuring our future low-carbon energy security."

There had also been concerns about the high price (£92.50 per megawatt hour) Britain had agreed to pay to EDF for the electricity generated, which has been called "extortionate". 

However, the new deal makes no change to the price and the amendments have centred on ensuring national security.

The new legal framework also gives the Government additional control over future critical infrastructure projects, such as a nuclear reactor at Bradwell in Essex, although it is not directly mentioned.

When the Hinkley deal was agreed by David Cameron last year, the agreement concerned only Hinkley Point but said the Government would look favourably on a Chinese-built reactor at Bradwell.

Mrs May's decision to stall the deal strained relations with the Chinese, who threatened to withhold UK investment.

Sky's Business Editor Ian King said: "This special share looks to be the new news here. It gives the Government control over who owns these power stations."

The Government says Hinkley will provide 7% of Britain's electricity needs for 60 years and create 26,000 jobs and apprenticeships.

EDF's boss, Jean-Bernard Levy, said the deal "marks the relaunch of nuclear in Europe".

360,559 people say NO to #hinkleypoint ~ #greenpeace taking petition to No 10 pic.twitter.com/SlpXYIKh2k

— Beth Rigby (@BethRigby) September 15, 2016

The earliest date the nuclear plant could be operational is 2025.

Unions, the CBI and the energy sector welcomed the decision, saying it was good news for jobs and for the future of the UK energy supply.

However, there was significant criticism that it was not a good deal for the taxpayer and the deal had gone ahead because after decades of delays and complications it had simply become "too big to fail".

The Liberal Democrats said Hinkley was a "waste of public money".

Lynne Featherstone, the Liberal Democrat spokesperson on Energy and Climate Change, said: "With the cost of renewables rapidly falling, Hinkley is now very bad value for money for the British taxpayer and should be abandoned immediately."

Joint leader of the Green Party, Caroline Lucas, said: "The biggest white elephant in British history given the green light. An absurd decision on every level."

John Sauven, Greenpeace executive director said: "Today's decision hasn't been made on the cold, hard facts that show Hinkley will not deliver competitively priced, low carbon energy any time soon.

"Instead it seems that Hinkley became too big to fail. The potential for political embarrassment for the new Prime Minister was too high."