France's EDF approves Hinkley Point nuclear reactor
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The board of French EDF on Thursday gave the go-ahead for the state-controlled utility's controversial project to build two nuclear reactors in Hinkley Point, Britain, a source familiar with the situation told Reuters.
The source said that following the resignation of board member Gerard Magnin in protest over EDF's strategy ahead of the meeting, the remaining 17 board members narrowly voted in favour of the final investment decision for the 18 billion pound ($24 billion) project, with 10 votes in favour and 7 votes against.
The source said the six staff representatives on the board, as well as Laurence Parisot, the former head of the French employers' organisation, voted against the project. Parisot was a candidate to become EDF chief executive in 2014.
If Magnin had not resigned and had voted against Hinkley Point, the Hinkley Point project would have been approved with a 10-8 vote, or just one vote to spare.
"This deal was riven with more dissent in the EDF board than anyone expected. It's an unprecedented division and a far closer (vote) than predicted," John Sauven, Greenpeace UK Executive director said.
EDF was not immediately available for comment.
EDF says the Hinkley Point project will be profitable and the French government argues it will support the French nuclear industry over the next decade.
The British government says that Hinkley Point, which will provide about seven percent of UK power, is crucial for securing power supply in the next decade.
Yet the project has strong critics on both side of the English Channel. French unions say the project is too big and costly for EDF and jeopardises the survival of the company.
Opponents in Britain – where it will be the first new nuclear plant to be built in decades – say that the price at which the government has agreed to buy power from EDF for 35 years, at more than twice current market levels, is too high.
The Hinkley Point project is a cornerstone of Britain's future energy policy. The country, one of the oldest nuclear power generating nations in the world, is relying on new nuclear plants like Hinkley Point to replace ageing stations. Nuclear plants do not emit any carbon and will thus help the UK meet its target to cut carbon emissions by 80 percent by 2050.
The government signed a 35-year electricity price guarantee contract, also known as a contract for difference, with EDF in October 2013, under which the utility will receive a top-up fee if power prices are below 92.50 pounds per megawatt-hour (MWh).
The British day-ahead power price is currently around 40 pounds per MWh.
Britain is not involved in funding the upfront costs of the project, which are carried by developer EDF and its partners.
However, the contract-for-difference agreement means that Britain will be paying for electricity generated from the plant if market prices are below the strike price level.
The National Audit Office has estimated that a recent fall in power prices has meant EDF's estimated top-up payments over the plant's lifetime have risen to 29.7 billion pounds from 6.1 billion pounds since 2013.
The project was first announced in 2007, when EDF energy's chief executive said Britons would be cooking their 2017 Christmas dinners with electricity supplied by Hinkley Point.
The plant's start-up date has been delayed several times since due to regulatory hurdles, the fallout from the Fukushima nuclear disaster and EDF's deteriorating financial position.
Britain's political commitment to the Hinkley deal has not wilted in the aftermath of the EU referendum, even though its two key architects, former Prime Minister David Cameron and former finance minister George Osborne have been replaced by Theresa May and Philip Hammond.
Shortly after taking office, Hammond said he hoped to be able to bring the project to a swift conclusion.
The UK government has staked a lot of political capital in the success of the project, lauding it as a crucial part of its energy policy mix and a blueprint for how government can work with the private sector to bring in infrastructure investment from key partners like China.