EDF could axe Hinkley Point unless France increases funding
By Paul Homewood
From the Telegraph:
EDF could scrap its plan to build the £18bn Hinkley Point nuclear plant in the UK if the company fails to receive further funding from the French government, its chief executive has revealed.
Jean-Bernard Lévy wrote to staff explaining that he was in talks to “obtain commitments from the state to help secure our financial position” as “the financial situation is tense”. He added that he would “not engage in the [Hinkley Point] project before these conditions are met”.
The French government, which holds an 85pc stake in EDF, could purchase a stake in the Hinkley Point project or take part in a company fundraising, according to the Financial Times, which first reported news of the letter.
Hinkley, the UK’s first new nuclear plant in a generation, is scheduled to start generating 7pc of the country’s electricity in 2025 but the scheme has been mired in controversy.
Despite generous subsidies, unions in France have raised concerns over the cost of the project, which was meant to be completed in 2017 but has been repeatedly delayed.
Earlier this week the European Commission approved a partnership between EDF and China General Nuclear to build Hinkley and two other nuclear plants in the UK, reducing the French firm’s financial burden.
EDF finance director Thomas Piquemal resigned earlier this week over the firm’s plan to push ahead with Hinkley, but Mr Levy added in his letter that he still expects Hinkley to be profitable, with a return of 9pc over 60 years.
A final investment decision from EDF is due as soon as April.
As I suggested a few days ago, we are heading for a situation where the UK is reliant on French government funding for Hinkley.
How on earth did we get into this mess?