The building of the £18 billion Hinkley Point power station in Somerset has been thrown into doubt after the government decided to put the project on hold, just hours after developer EDF had given it the go-ahead.
The South West reactor was expected to become Britain’s first new nuclear plant for a generation, but in a statement Greg Clark, the business and energy secretary, said a final decision will now be delayed until the autumn to allow ministers to carefully consider the project.
He said: “The UK needs a reliable and secure energy supply and the government believes that nuclear energy is an important part of the mix. The government will now consider carefully all the component parts of this project and make its decision in the early autumn.”
However, while understanding the need to review the contract further, Josh Hardie, CBI deputy director-general, said the government “must press ahead to finalise the deal as soon as possible.”
He said: “The UK is facing a major investment challenge to ensure a secure, low-carbon and affordable energy supply. It’s crucial that we see clear and timely decisions, and send a definite message that the UK is well and truly open for business.
“In particular, clarity is needed around the next Contracts for Difference auction and the post-2020 Levy Control Framework, to build investor confidence.”
Angus Walker, partner and head of the government & infrastructure team at Bircham Dyson Bell, said the decision to push back the project was a “very significant moment for the future of the UK’s energy supply.”
He said: “Although then Secretary of State Amber Rudd said in April that the lights would stay on even if Hinkley did not go ahead, there must be considerable relief around the cabinet table that an additional seven per cent of low carbon energy will be generated in the next 10 years.
“This also means that EDF’s next project Sizewell will get going, and the prospect of an ‘energy crunch’ (demand outstripping supply) will have receded for the time being.”
On Thursday, EDF’s board of directors approved the final investment decision to build the two nuclear reactors at Hinkley Point C.
A spokesperson for EDF said: “The HPC Project is a major element of the Group’s CAP 2030 strategy. The two EPR reactors at Hinkley Point will strengthen EDF’s presence in Britain, a country where its subsidiary EDF Energy already operates 15 nuclear reactors and is the largest electricity supplier by volume.”
Commenting on EDF’s approval for the construction of the nuclear plant, Hardie said: “The final green light for Hinkley Point is welcome news as now, more than ever, action is needed on key infrastructure projects which attract investment to the United Kingdom.
“The project represents a significant milestone in the United Kingdom’s energy future. It will play a key role in further securing and decarbonising our energy supply, putting us on the right path to a sustainable energy mix.
“We hope it will also help kick start a new nuclear build programme, creating jobs for tens of thousands of people – not just in the local community, but up and down the whole country.”