Our nuclear industry is reawakening,’ energy secretary Claire Coutinho declared in a Government strategy document published earlier this month.
In between invoking Winston Churchill’s enthusiasm for nuclear power and its ability to help the UK reach net zero, Coutinho added that setting up new plants would ensure our energy security ‘so we’re never dependent on the likes of [Vladimir] Putin again’.
Fighting talk. But in the space of a fortnight, Coutinho’s gung-ho attitude has already been dented as a diplomatic row brews over who should pay for the controversial power stations.
French state-owned energy company EDF last week lit the blue touchpaper with the revelation the UK’s flagship Hinkley Point C nuclear plant in Somerset would be delayed until 2029 at the earliest. The cost, it added, could spiral to as much as £46billion, from initial estimates of £18billion.
Costly: The early stages of construction at Hinkley were undertaken by EDF and the Chinese
Few in the industry will have been surprised, particularly as EDF has experienced delays on similar projects in Finland and France. But what was a shock were some incendiary remarks from the French government.
The Elysee Palace began pressing the UK to help plug a funding gap at Hinkley and for good measure cast doubt over its commitment to Sizewell C, the next nuclear power station in the pipeline.
A French Treasury official suggested the Government was trying to leave EDF in the lurch on Hinkley.
The official added that it cannot, at the same time, abandon the French firm to ‘figure it out alone’ on Hinkley and also expect it to plough money into Sizewell. It is, the official said, ‘a Franco- British matter,’ and not one for the French to resolve single-handedly.
This is a bad moment for two critical new nuclear plants – and our broader energy security – to be dragged into a cross-Channel tussle.
The French government, which was previously relaxed about EDF’s forays into UK nuclear, now wants its energy company to work on projects back home in France.
Well-placed UK sources deny the French claims that EDF has been left to shoulder the financing burden alone at Hinkley, or that it has been jettisoned by the British state.
They point to the fact EDF has all along had contractual obligations to shoulder the costs at this stage of the project. The early stages of developing Hinkley were undertaken by EDF along with China General Nuclear.
The Chinese firm has fulfilled its part of the bargain, leaving the onus on the French. ‘It’s all down to the French state,’ a senior industry source told The Mail on Sunday. ‘It’s tough, but they’ve not managed it at all well.’
A Department for Energy Security and Net Zero spokesman said: ‘The Government plays no part in the financing or operation of Hinkley Point C. The financing of the project is a matter for EDF and its shareholders.’
As well as backing Hinkley, EDF several years ago began serious talks with the Government over Sizewell C in Suffolk. Each could power an estimated 6 million homes for 60 years, meaning the two projects are linchpins for meeting future energy demand.
The French group is due to take a 20 per cent stake in Sizewell. The Government has previously indicated it will take 20 per cent. It was hoped the rest would be funded through money from the private sector, such as pension funds and sovereign wealth funds.
So far, Britain has put £2.5billion into the project in total and taxpayers are the biggest shareholders. Campaigners who vehemently oppose the project are alarmed by the recent comments from Paris, pointing out that if the French back off from Sizewell, taxpayers could be on the hook for huge extra amounts of cash via their bills.
The new type of funding structure for Sizewell C means consumers will already face an added tax to help pay for the plant.
Alison Downes of the Stop Sizewell C campaign group said: ‘It would be madness to give Sizewell C the final go-ahead while the questions of whether Hinkley C can be finished, and who pays, are not resolved. Sizewell C is bound to take longer and cost more, but this time it would be we consumers who would bear the risk and pay the price through the “nuclear tax” on our energy bills.’
And another area of the industry is watching the fracas with mounting frustration.
Companies vying to build ‘mini’ stations known as small modular reactors (SMRs) hope this prompts the Government to commit instead to their projects, which are quicker to build and cheaper.
The firms include Rolls-Royce SMR, which has already received significant funding from the Government. New nuclear plants of whatever size will almost certainly be part of the UK’s energy mix in the years to come.
The sector had already been championed by Boris Johnson before soaring oil and gas prices in the wake of Russia’s invasion of Ukraine highlighted Britain’s dependence on overseas energy.
Any fisticuffs with France over Hinkley and Sizewell would strain the sector and could fatally damage the level of public. Industry figures are urging ministers to resist stumping up cash the French had agreed to pay.
One senior source said: ‘I hope the Government doesn’t lose its nerve, though there’s no sign of that at the moment. It would be a terrible precedent.’
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