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Hinkley Point: a huge nuclear gamble for France
by Staff Writers
Paris (AFP) Sept 15, 2016

Development of a giant new UK nuclear power station
London (AFP) Sept 15, 2016 - Hinkley Point C will be Britain's first new nuclear power station in more than 20 years.

However, the gigantic project has taken years to get the go-ahead and has met with strong opposition along the way.

Here are five key questions about the development:

Why has Britain given it the green light?

Several British nuclear power stations are reaching the end of their operational life.

The Electricite de France (EDF) group was chosen due to its European Pressurised Reactor, a third-generation design considered the most advanced and safest in the world.

Why are the Chinese involved and caused jitters?

The state-run China General Nuclear Corporation (CGN) became an investor because EDF did not have the financial clout on its own.

Also former prime minister David Cameron wanted to open up a golden age of relations with China to help pull Britain out of the financial crisis. Meanwhile, China wanted a foot in the European nuclear energy market.

Nick Timothy, current Prime Minister Theresa May's joint chief of staff, thought it "incomprehensible" that China could have a hand in Britain's electricity network, citing risks to industrial security.

Consequently Britain has now set conditions to address concerns about China's role in a landmark European project.

Why is it so expensive and who will pay the bill?

Nuclear technology always requires huge investment but the Hinkley project is particularly costly due to the use of two reactors that will be among the most powerful in the world.

The project estimated to cost 18 billion (21 billion euros, $24 billion) also involves land acquisition and tortuous approval procedures.

Besides the investors EDF and the CGN, the final cost will also be met by British energy consumers. The government has guaranteed EDF a price of 92.50 per megawatt hour -- deemed overpriced by critics.

What are the risks and why go ahead despite them?

Besides the cost, the project could be subject to lengthy delays, like EDF's Flamanville plant in France, which is behind schedule and subject to mounting costs.

However, Britain needs to find new sources of electricity going into the future, while respecting their ambitious objective of reducing carbon dioxide emissions by 57 percent by 2030, compared to 1990 levels.

What alternatives do Hinkley opponents propose?

Some are proposing smaller-scale nuclear power stations that are easier to get up and running and less catastrophic in case of an accident.

Renewable energy could be developed to a greater extent, notably wind power. Britain has several offshore wind projects.

Critics cite the dominant nature of the Hinkley project, saying it slows down development of alternative technologies, such as storing electricity.

The British government's long-awaited green light for the Hinkley Point nuclear power station in England on Thursday is of vital importance to France and its state-backed energy industry.

French nuclear power giant EDF is piloting the 18 billion (21 billion euro, $24 billion) project with investment from China.

Here are the stakes for France:

Nuclear power key to French economy

Nuclear power is crucial to the French economy, and state-controlled French power company EDF will be relieved that the project has finally got the go-ahead.

EDF, which is nearly 37 billion euros ($41.5 billion) in debt, hopes it will lead other European countries to rethink their nuclear strategy -- and green-light projects for which it can provide the technology.

"I think the British government's decision will lead many other European countries who have not really decided how they will cover their long-term energy needs to have a rethink," said EDF chief executive Jean-Bernard Levy.

EDF is already planning to build two more nuclear reactors at Sizewell in eastern England. The firm will also help China, the world's biggest producer of nuclear energy, to build its own reactor at another British plant in Bradwell, southeast England.

Boost for new technology

Crucially, the go-ahead is also a vote of confidence for the third-generation EPR reactors developed by EDF that will be used at Hinkley Point.

Another plant in France featuring the new technology, Flamanville on the Normandy coast, will be the world's largest nuclear reactor when it goes into operation in late 2018.

But this project, as well as another in Finland, has been plagued by delays and cost overruns which have discouraged other investors from opting for EPR reactors.

Francois Pouzeratte, an energy specialist at Eurogroup Consulting, said the go-ahead Thursday "will allow know-how to be retained (because) without Hinkley Point there would have been a hole in the French capacity to build power plants."

Project carries huge risk

The enormous cost has led French unions and even a former EDF board member to warn that it could bankrupt the heavily indebted company.

Paul Marty of Moody's said the "scale and complexity" were likely to add significant business and financial risks to EDF's balance sheet.

He warned it will "have to shoulder the financial implications of a very long construction phase during which the investment will not generate any cash flow."

EDF had to take a 66.5 percent share in the project when it was unable to find other partners to join it and China's CGN in the financing.

Gerard Magnin quit the EDF board this year because he could no longer support the strategy of the company and the French government to push nuclear energy at the expense of other options.

"As a board member backed by the shareholding government I no longer wish to support a strategy with which I disagree," Magnin said in the letter.

France needs EDF to succeed. The French state has already poured in billions to keep its competitor Areva afloat and thousands of French workers on the payroll.

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