The Hinkley Point C project faces potential delays following news that EDF has postponed a final decision on funding.
The French company was set to hold a meeting at the end of January 2016 in order to finalise its funding for the project, but this was postponed.
The company is understood to be having difficulty raising the £12.4bn it needs to build the two European Pressurised Reactors; a capital sum almost as much as its entire stock market valuation.
The Independent has reported that the company’s powerful unions and several senior EDF executives believe that the project could be suicidal for the world’s biggest generator of nuclear energy. They want EDF to abandon the project, or at least persuade Britain to wait another three years until a more advanced generation of EPR reactors is available.
Nonetheless, the French government, which owns more than 80 per cent of EDF, is putting pressure on the company to fulfil its agreement, and there is significant political pressure from David Cameron for the project to proceed.
In October 2015, EDF signed an agreement with Chinese investors to provide about a third of the funding for the £24.5 billion development, in exchange for a one-third stake. Following this deal, EDF was expected to confirm its own share of funding. The company also aimed to secure additional investors for the project.
Separately, Hinkley Point C nuclear power station Project Director Chris Brakken – who had led the project for the plant in Bridgwater for four years – has left the role that saw him involved with design, licensing, procurement, construction and commissioning. EDF said Mr. Brakken has moved back to his native USA to take up a role as Executive Vice-President and Chief Nuclear Officer for Entergy Corporation in Texas.
Under current plans, Hinkley Point is due to be completed by 2025 and is predicted to supply seven per cent of Britain’s energy.
Rob Chedzoy, Partner at Milsted Langdon, said: “Despite these setbacks, there is a huge amount of momentum behind the project, and we remain convinced that it will progress. Many of our clients will see significant benefits from the Hinkley development, even if they are not directly involved in the supply chain, when it goes online.
“There are however some significant risks, given the already tight local labour market, particularly for high value staff with transferrable skills. We can help those involved in Hinkley work, or hoping to be involved over the coming years, as well as those actively deciding to concentrate on their existing business.
“Whether you are directly involved with the development, part of the supply chain, servicing workers in the local area, or own properties nearby, it will be hard to avoid the impact of this enormous project over the coming years.”
Whatever the nature of your business, we would be delighted to help you address the challenges that lie ahead. Our corporate finance, tax and business intelligence teams are well placed to help. If you would like to discuss planning for the changes that will arise over the next few years, please call Rob Chedzoy on 01823 445566 or email: email@example.com.