It has been a remarkable week for the £18 billion Hinkley Point C nuclear project in the UK. The board of EDF met on 28 July expecting to make a final investment decision that would determine whether the plant would be built as planned and commit France’s nuclear building industry to the project.
In the run-up it was announced that the French state, which owns large majority shares in EDF (the owner) and Areva (the builder) was prepared to pour billions of euros of the country’s taxpayers’ money into EDF investment that would effectively keep the whole process, and with it the nuclear industry, alive for the foreseeable future. In a separate fund raising attempt, EDF entered into talks on 25 July with state-owned bank Caisse des Depots and its unit CNP Assurances aimed at selling them a 49.9 % stake in French TSO RTE. The deal would be done on the basis of an indicative value of €8.45 billion for 100 % of RTE's equity and it could close in the first half of 2017, once regulatory approvals had been obtained. That would raise about €4,2 billion. Under a 2004 law, RTE's capital must be held by EDF or other public entities.
The day before decision day Gérard Magnin, one of France’s state representatives on the board, resigned in protest, stating that he believed the project was financially risky and would lead France further away from renewable energy. Undeterred, after its meeting on 28 July the EDF board announced that it had voted 10-7 to go ahead with the project.
For a few hours it seemed that the deal was done and that it only remained for the UK government, the Chinese investors and the main suppliers to formally sign contracts. But there was still major surprise left in this ongoing reality drama. Instead of welcoming the decision with open arms and bank accounts, as briefings before the event had led everyone to expect, new UK prime minister Teresa May’s government reacted by putting off its own decision to go ahead until an undetermined date in the autumn.
The given reason is that the new UK cabinet needs more time to reconsider all the factors, but there is a rumour that its advisors have raised the spectre of security issues. They are concerned that a principal Chinese investor in the project, Chinese National Nuclear Corporation, which has been tempted in by the promise of approval to build a nuclear plant of its own, to its own design, at Bradwell on the coast of southeast England, will build in hidden software that could be used to sabotage the UK’s entire power production network. Part of the evidence for this perhaps fanciful scenario is that CNNC is a self-declared ‘builder of Chinese national defences’.
Whatever the truth of it, the new delay (which cannot cause too much protest among members of EDF’s board, which has specialised for months in the art of delay) has shocked EDF which was so sure of its ground that a celebratory party was fixed for 29 July on the Hinkley site. Now the party has had to be cancelled, and the party marquee, the champagne, the party hats and the assembled TV crews have been sent away.
French investors however appear to agree more with Gérard Magnin than with EDF and have voted approval of the delay – immediately the markets opened, shares in EDF rose 11%.