On 28 July, bottles of champagne stood ready to receive celebrating VIPs at the site for two planned European Pressurised Reactors (EPRs) at Hinkley Point C in Somerset. But dignitaries and investors were left with empty glasses, as that same day, prime minister Theresa May announced a delay on plans for Hinkley and a freeze on the £18 billion building of a much-needed 3.2 gigawatt of electrical capacity.
This delay has caused considerable upset for French company EDF (the main contractor) and has outraged Chinese investors. May’s decision has also delighted anti-nuclear Greens, who view Hinkley as a costly white elephant, emblematic of the sins of nuclear power.
But May’s reversal isn’t just the cautious approach to be expected from a new, cost-conscious government. Within this unelected, prevaricate-about-Brexit administration, there’s also a disgraceful mix of nuclearphobia, Sinophobia and cyberpanic. Coupled with a policy of protectionism, it’s no wonder plans for Hinkley have been delayed.
The charges against Hinkley Point C
What’s wrong with Hinkley? Firstly, the board of France’s indebted, state-owned, nuclear electricity specialist EDF has continuously argued about whether or not to go ahead with plans for Hinkley. EDF has already racked up enormous delays and cost overruns with its first two EPRs, in Flamanville, France, and Olkiluoto, Finland. Its indecision over Hinkley has had a similar effect, inflating costs from £6 billion to £18 billion.
Secondly, former prime minister David Cameron’s previous government agreed an exorbitant and fixed price at which to buy electricity from EDF for the next 35 years. The decided price of £92.50 per megawatt-hour in 2012 money has forced the government to find £30 billion or even £37 billion in extra taxes. Given the collapse of gas prices since 2014, that £92.50 compares very poorly with the current price of gas-fired electricity.
Thirdly, rather than loan Hinkley cheap government funds, the Treasury insisted that plans were carried out off its books. Instead, the Chinese energy corporation CGN (China’s largest reactor builder), and later the China National Nuclear Corporation (CNNC), were each invited to take third of a stake in the project. There was a bonus, too: the agreement with Britain signed by Chinese president Xi Jinping in October covered not just Hinkley, but also the erection of a Hualong One Pressurised Water Reactor, jointly developed by CGN and CNNC, in Bradwell, Essex. This gave the export of Chinese reactor technology a key foothold in Britain, as well as the world market.
So what’s the problem with that? May, and others, regard China’s presence at Hinkley and Bradwell not just as financially and physically intrusive, but a means of opening up a whole range of important industrial sectors in Britain to remote manipulation by Beijing. An article in The Times outlined fears about threats from the Chinese People’s Liberation Army, which, it suggested, could have as many as 100,000 hackers at its disposal: ‘China has a history of covert cyberintrusion against its commercial and military rivals. Of interest to the Chinese authorities appears to be infrastructure critical to society, including electricity grids, water purification plants, air traffic control, the rail network and telecommunications. By most estimates, these are strategically sensitive assets.’
Both Cameron and Osborne tried too hard to woo Chinese business during their time in government. But now, in the spirit of post-Brexit anxiety, Chinese business is abruptly feared by the new administration as a direct military threat.