France’s EDF signs $26-billion deal to build new UK nuclear plant

LONDON - Agence France-Presse

The British government and French company EDF Energy have announced to agree to build the Hinkley C, first nuclear power station in a generation to be built in Britain. REUTERS photo

French energy giant EDF said yoday it had clinched a deal worth $26 billion (16 billion pounds, 18.9 billion euros) to build Britain’s first new nuclear plant for a generation, with Chinese backing.

EDF has agreed to construct two nuclear reactors at Hinkley Point C, in southwestern England, alongside French nuclear group Areva and Chinese nuclear firms CGNPC and CNNC.

The price of shares in Areva jumped by slightly more than 4.0 percent in initial trading in Paris in reaction to the deal.

“EDF Group and the UK Government have reached in principle an agreement on the key commercial terms for an investment contract of the planned Hinkley Point C nuclear power station,” EDF said in a statement.

The project is aimed at providing Britain with secure and reliable low-carbon electricity, and will create thousands of jobs, but the deal is likely to face criticism over the high price that will be paid for electricity. “As part of our plan to help Britain succeed, after months of negotiation, today we have a deal for the first nuclear power station in a generation to be built in Britain,” British Prime Minister David Cameron said in the statement.

“This deal means 16 billion pounds of investment coming into the country and the creation of 25,000 jobs,” said Cameron, who heads a Conservative-Liberal Democrat coalition government.

Areva to construct two reactors

Areva will construct the two EPRs or European Pressurized Reactors, taking a 10-percent stake in the project.

EDF Group will have a 45-50 percent stake, while China General Nuclear Corporation (CGN) and China National Nuclear Corporation (CNNC) will together take a 30-40 percent stake.

Finance minister George Osborne had paved the way for the deal last week, announcing on a visit to Beijing that Chinese firms would be allowed to invest and take majority stakes in civil nuclear projects in Britain.

Discussions are meanwhile ongoing with other interested parties over the remaining 15-percent share.
“This underlines the confidence there is in Britain and makes clear that we are very much open for business,” added Cameron.

“This also marks the next generation of nuclear power in Britain, which has an important part to play in contributing to our future energy needs and our longer-term security of supply.” The accord also agrees a guaranteed price for the energy produced by the two reactors, which had been a major sticking point in the negotiations between the firm and the government.

At full capacity, the two new reactors will be able to produce seven percent of Britain’s electricity, enough to power five million homes. If the deal is confirmed next year, the power station, in south-west England, will be operational by 2023.

“The agreement in principle reached today with the British Government significantly strengthens the industrial and energy co-operation between France and the United Kingdom,” added EDF group chairman and chief executive Henri Proglio. 

“The EPR project at Hinkley Point represents a great opportunity for the French nuclear industry in a context of a renewal of competencies.