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From feast to farce: how the big Hinkley Point C party was put on ice

July 29, 2016

The total lifetime cost of the planned Hinkley Point C nuclear power plant could be as high as £37bn, according to an assessment published by the UK government. The figure was described as shocking by critics of the scheme, who said it showed just how volatile and uncertain the project had become, given that the same energy department’s estimate 12 months earlier had been £14bn. The latest prediction comes amid increasing speculation about the future of the controversial project in Somerset, whose existence has been put in further doubt by post-Brexit financial jitters. Hinkley has been a flagship energy project for the British government and in particular for the chancellor, George Osborne, who lobbied hard and successfully for China to take a stake in the scheme. Officials at the Department of Energy and Climate Change (DECC) on Thursday confirmed the £37bn figure, but said it was provisional, set in September 2015, when wholesale power prices were low, and would not affect bill payers.

“Hinkley will generate enough low-carbon electricity to power six million homes and around £10 [a year] from [each] consumer’s bill will pay for it once it is up and running. We have set the strike price to protect bill payers if energy costs go up or down, so the cost of the project to consumers will not change,” a DECC spokesperson said. “Today’s report from the IPA (Infrastructure and Projects Authority) does not suggest that the lifetime costs of Hinkley have increased. It is a sna shot of the position at the end of September 2015.” EDF said the £37bn figure should be disregarded. “Hinkley Point C will generate reliable low-carbon electricity in the future, so a cost estimate based on last year’s depressed wholesale price is not relevant. HPC’s electricity will be competitive with other low-carbon energy options and consumers won’t pay a penny until the plant begins operating.” But experts said the extra money, if the cost did remain at £37bn, would have to come from somewhere – probably the taxpayer – or be shaved off other DECC budgets available for different energy projects, such as windfarms and solar arrays. “This whole-life cost of £37bn is a truly shocking figure. It is an extraordinary ramp-up from last year’s figure, and just underlines how hard it is to get a real handle on the long-term cost of Hinkley,” said Paul Dorfman, senior research fellow at the Energy Institute, University College London.

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SOURCE = The Guardian

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Hinkley Point: Putting the brakes on could be prudent in light of security concerns over China

July 30, 2016

As China’s President Xi Jinping arrived on a state visit to the UK last October, the head of an educational charity warned that the British Government should be wary of hugging a dictator so closely. Writing on the ConservativeHome website, Nick Timothy, head of the New Schools Network, accused the Government of David Cameron and George Osborne of being so keen to open up the Chinese market for British business, and draw Chinese investment to the UK, that they were not only overlooking China’s dismal record on human rights but were also potentially putting national security at risk. Of particular concern was the proposed deal that would give Chinese state-owned companies a 33.5 per cent stake in the proposed power station at Hinkley Point, and possibly in two other new nuclear plants. Mr Timothy found it “baffling” that the Government should welcome this when “security experts … are worried that the Chinese could use their role to build weaknesses into computer systems that will allow them to shut down Britain’s energy production at will.”

Mr Timothy is no longer working in the charitable sector. He is in Downing Street, doing the equivalent job to the one he used to do in the Home Office, as Theresa May’s chief of staff. One Westminster insider once told The Spectator that this man, known as “Theresa’s brain”, influences her thinking “to an almost scary extent”. Therein could lie a large part of the explanation for the sudden and unexpected decision to put the entire Hinkley Point project on hold, on the very day when the contracts were to be ceremonially signed after the board the French energy firm, EDF, who were to pay two-thirds of the construction costs, had committed themselves to going ahead. Even if China were not ruled by a secretive dictatorship and were not home of some of the world’s most prolific and skilful computer hackers, there would still be a host of reasons for worrying about whether the Hinkley Point project was worth the risk.

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SOURCE = The Independent

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Hinkley Point presents cost and security issues

July 29, 2016

For anyone who thought Britain leaving the EU would mean pivoting closer to China, Theresa May, the new prime minister, has at least a partial answer — not so fast. Her government’s decision to delay approval for the Hinkley Point nuclear power plant this week has implications for Anglo-Chinese relations that reach far beyond the project itself. Already 10 years in the making, the plan was conceived to kick-start a nuclear “renaissance” as old coal-fired plants become obsolete. When the China National Nuclear Corporation (CNNC) and China Guangdong Nuclear Power agreed to take a 33.5 per cent stake, Hinkley assumed additional importance. It was the initiative that cemented the “golden era” of relations proclaimed by the UK and China when Xi Jinping, the Chinese president, visited London last year. This was a central plank in one of the main foreign initiatives of David Cameron’s premiership. It too now appears to be under review as policy is reset at a furious pace by his unelected successor. For all the diplomatic and political ramifications, there have long been economic reasons to question the Hinkley project and whether it marries Britain’s energy needs with ambitious emission reduction targets in the most cost-effective way. Even EDF, the French utility leading the project, is split over the risks it entails.

In addition, Downing Street fears that Chinese investment in such a sensitive sector could lay Britain open to future energy blackmail. Historic unease among some Conservatives at the degree to which the UK has turned a blind eye to human issues in China in the quest for commercial opportunity may too have played a part. Delays to the project will be a complicating factor at a time when Anglo-French relations are already under strain. For Paris it is imperative to prove that new technology to be built at Hinkley by EDF is viable after endless problems with reactors under construction in Finland and France. Export orders are also vital for the French nuclear industry at a time when Japan and Germany have both ended their nuclear programmes.

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SOURCE = Financial Times

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Theresa May ‘raised objections to project as home secretary’

July 31, 2016

Theresa May raised objections to the Hinkley Point C nuclear power deal during the coalition government, the former business secretary Sir Vince Cable has claimed, in remarks that will throw fresh doubt over the project’s future. Cable said that as home secretary, May had been unhappy about the former chancellor George Osborne’s “gung-ho” attitude to Chinese investment. Speaking after May unexpectedly delayed signing-off on government support for the new power station, Cable described the late decision as clumsy but understandable. “Certainly, when we were in government, Theresa May was, I think, quite clear that she was unhappy about the rather gung-ho approach to Chinese investment that we had, and that George Osborne in particular was promoting and, as I recall, raised objections to Hinkley at that time,” he said.

EDF’s board had voted narrowly to give its final go-ahead for the long-delayed joint project on Thursday, only for Downing Street to pull back from signing the contract and say it would make a decision in the early autumn. The move surprised EDF executives, who were preparing to sign contracts with the government the next day. The company’s UK chief executive, Vincent De Rivaz, was forced to cancel a round of media interviews. Officials from China General Nuclear, which has a one-third stake in the Hinkley project, were also expected to attend a media event in Somerset. De Rivaz has since written to workers in a bid to reassure them the £18bn project is still strong despite the unexpected delay. He said he had met the business and energy secretary, Greg Clark, after the announcement that the government would “consider carefully” all parts of the project before making a decision.

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SOURCE = The Guardian

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Hinkley Point nuclear deal: Theresa May demanded national security checks on Chinese investors, says Vince Cable

July 30, 2016

Theresa May privately demanded strict new national security checks on Chinese companies seeking to take over British industries, a former cabinet colleague has revealed. Sir Vince Cable, business secretary until last year, suggested the Prime Minister had a “general prejudice” against Chinese investments in Britain and wanted to emulate American rules banning foreign takeovers that could undermine security. The disclosure came after Mrs May delayed a decision on whether to allow the China-backed Hinkley Point nuclear project to go ahead. Speaking to the Telegraph, Sir Vince detailed Mrs May’s long-held security concerns over China’s involvement in the £18  billion nuclear power plant in Somerset and other business links with China. He said she was “never completely satisfied about Huawei”, the Chinese telecommunications giant, which has a major partnership with BT. “I and others thought they were a good thing but I think she was worried about them,” he said.

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SOURCE = The Telegraph

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Cable: May Had Hinkley Concerns As Home Sec

July 30, 2016

Theresa May had concerns about the Hinkley Point nuclear power plant deal during the coalition government, according to Sir Vince Cable. The Lib Dem former business secretary told Sky News that Mrs May as home secretary was “anxious” about having Chinese involvement in the £18bn project. The ex-cabinet member was speaking after the Prime Minister unexpectedly delayed signing-off on the project at the last minute on Thursday. It is thought there are security concerns about the role of the Chinese state – which has a one third share in the project – investing in critical infrastructure in the UK. There has also been criticism about the amount of money French energy giant EDF will be paid for generating power from Hinkley – £92.50 per megawatt hour of electricity generated.

Sir Vince said: “Throughout the coalition government she had concerns about foreign investment that encroached on what she regarded as national security. “This was an issue that was raised in general but also raised specifically in relation to Hinkley. Most of us who looked at this came to the conclusion that the Chinese are good investors and their role in this project is not operational. “But it was understandable that the home secretary would raise those questions and it’s played into the wider doubts about the project that have come in, about the technology, the cost… and I understand why she wants to have a proper look at this again.”

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SOURCE = LBC News

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Theresa May puts the brakes on Hinkley Point nuclear power project amid security fears over China’s involvement

July 30, 2016

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SOURCE = The SunThe Sun

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