15 Sep 2016

Hinkley: Government approves £18bn nuclear power station plant

Theresa May has completed her fresh look at the Hinkley Point C nuclear power station and it’s now been signed off.

The government is proclaiming it has revised the deal but there are no truly major changes.

One senior Whitehall official told me that having stalled the plan, panicked about the impact of reversing it, a cry went out in Whitehall that a climbdown was needed: “someone get me a ladder!”

Ed Davey, the Energy Secretary in the Coalition government, says he’d already proposed the golden share idea that the government has now accepted. He suspects George Osborne stamped on it at the time because he was worried it might upset the Chinese investors he was keen to win over.

Does it make that much difference if the government has a golden share?

Back in 2012-13, there was a Senior Official Group appointed in Whitehall to review the security implications of foreign investments in areas like major infrastructure projects. It looked at all the issues cantered round at speed again in the last few weeks. It concluded that ownership was not a major worry as long as there was proper operational control:  proper checks on who is at  the control room switches in a power station (staff vetted by GCHQ) and proper control keeping the relevant data in this country.

This review concluded that “ownership” really wasn’t much of an issue and proper operational checks meant the Chinese or any other overseas power would not, for instance,  be able to switch off the nation’s powers at a moment of international tension.

CGN, the state owned Chinese nuclear energy firm, gave a hearty welcome to the government’s review. That tells you that the Chinese believe they are still hoping to build and design a nuclear reactor at Bradwell in Essex.

That requires them to clear all sorts of design and cost hurdles. But right now an immediate rupture in Sino-British relations has been avoided. The Chinese Ambassador in London had signalled how millions of pounds worth of unrelated Chinese investment in the UK could be pulled if London ruled out a Chinese reactor. But do the Chinese still think they are on a promise?

Those closely involved in the original deal to leverage in Chinese money to help EDF build Hinkley C are adamant that it was a clear promise: fund Hinkley, build Bradwell. The 2015 agreement between China and Britain says  both countries “welcome the proposal for a Chinese-led project at Bradwell B … subject to meeting the requirements applicable.”

No. 10, particular the Sino-sceptic joint Chief of Staff, Nick Timothy, may have been appeased by the caveats in that agreement that the Chinese can submit their plans but the independent regulator gets to choose who wins the contract. China may have been more focused on the sentence in the signed agreement: “This will mark the beginning of genuine long-term strategic partneships” in nuclear energy.

By the way, anyone wanting to check how much nuclear is contributing right now to the grid, if you haven’t seen it already, have a look at this. On a very still day, wind turbines not turning much.

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