France’s EDF to build new UK nuclear reactors

French energy giant EDF has signed an agreement to build at least one next-generation nuclear reactor in England for a total cost of 19 billion euros, the utility company announced on Monday.

The European Pressurised Water Reactor (EPR), designed by French nuclear developer Areva, will be built at Hinkley Point C in Somerset, south-west England.

The contract will last for 35 years from the date of commissioning, which is expected in 2023. The reactor will supply around seven percent of the UK’s electricity needs.

Under the deal, EDF said it would take a 45 to 50 percent stake in the consortium, while its partners China General Nuclear Corporation (CGN) and China National Nuclear Corporation (CNNC) are expected to take 30 to 40 percent. Areva will get 10 percent.

EDF said it was in talks to build two EPRs at Sizewell C in Suffolk, south-east England.

While the agreement is a boon for the French nuclear industry at a time when the government has pledged to reduce the country's dependence on nuclear power, it was also hailed as a jobs and investment boost for the United Kingdom.

“This deal means 16 billion pounds of investment coming into the country and the creation of 25,000 jobs,” British Prime Minister David Cameron said in a statement released in London on Monday.

“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,” he added, in reference to warnings by regulators that the UK risks electricity blackouts unless it starts replacing obsolete power plants.

Under the deal, EDF will earn 92.50 GBP (109 euros) per megawatt hour, or 89.5 GBP if the second nuclear plant project at Sizewell goes ahead. The price is roughly double the current wholesale price for electricity in the UK.

Nuclear winding down elsewhere

The nuclear industry has been under a cloud since the 2011 Fukushima, Japan, disaster. Germany has decided to phase out nuclear power, while Italy has scrapped a planned nuclear programme.

France has pledged to cut atomic power to 50 percent of its electricity mix from 75 percent today.

However, Britain's government and main opposition parties support nuclear power, and anti-nuclear sentiment among the population is muted by comparison with other parts of Europe.

"This marks the next generation of nuclear power in Britain," Cameron said in his statement.