Britain’s first new nuclear power station for a generation is in fresh doubt after the government postponed a final decision on the £18bn project, despite the French energy company behind it voting to start work.
The government said ministers would now conduct another review of the controversial Hinkley Point C project and announce its decision in the early autumn.
The announcement surprised EDF, whose directors were preparing to sign contracts with the government on Friday.
EDF’s UK chief executive, Vincent De Rivaz, was expected in Somerset on Friday morning alongside senior company officials to give interviews about the project. But following the government statement, it emerged that no interviews would take place.
Officials from China General Nuclear (CGN), which has a one-third stake in the Hinkley project, had also been expected to attend an event.
Greg Clark, the business, energy and industrial strategy secretary, said: “The UK needs a reliable and secure energy supply and the government believes that nuclear energy is an important part of the mix.
“The government will now consider carefully all the component parts of this project and make its decision in the early autumn.”
The new nuclear power station would be Britain’s first since Sizewell B opened in 1995 and is considered vital in helping the country meet its energy requirements.
However, Hinkley Point C could eventually cost British taxpayers almost £30bn in subsidies to EDF and its Chinese backer.
The government strongly backed the project when David Cameron was prime minister, and EDF’s commitment was expected to be welcomed as a vote of confidence in the economy after the country voted to leave the EU. The chancellor, Philip Hammond, gave his backing to Hinkley Point C two weeks ago, saying: “We have to make sure the project goes ahead.”
However, Theresa May’s government is understood to have agreed a new timetable with the French government for the project.
A No 10 source said: “EDF made their announcement, and we have agreed a timetable with the French government, which means we will consider all the component parts of this project and make a decision in the early autumn.”
Labour’s energy spokesperson said the Hinkley deal was in “absolute chaos” and accused the government of prevaricating.
“The government has said for two years now that they didn’t need a plan B,” Barry Gardiner told BBC Radio 4’s Today programme on Friday. “And now at a day’s notice they cancel the final signing agreement that they told all the press and everybody that they were going to do.”
However, Gardiner said Labour was in favour of changing the deal rather than scrapping it. He said the base price of £92.5 a megawatt-hour was too high and should be renegotiated and called for a root and branch review by the government.
“I welcome the jobs and I welcome the 7% electricity this will produce for the nation,” he added. “We’re not against nuclear power in principle. Let me be absolutely clear, I speak as the shadow secretary of state for energy and climate change in Jeremy’s shadow cabinet and we are absolutely clear we are in favour of nuclear power as part of the energy mix we need.
“But in 2025 we need that power because coal will no longer be producing, the government have said that, coal will be off the system. That means we need the base load nuclear would provide.”
After a decade of debate about the controversial project, the board of EDF approved Hinkley Point C by 10 votes to seven, according to sources close to the company.
The construction will create an estimated 25,000 jobs, with completion scheduled for 2025 and work potentially beginning next year. The two nuclear reactors at the plant will provide 7% of Britain’s electricity, enough power for 6 million homes.
EDF said in a statement: “Hinkley Point C is a unique asset for French and British industries as it will benefit the whole of the nuclear sectors in both countries and will support employment at major companies and smaller enterprises in the industry.”
There was another twist to the contentious project in the run-up to the meeting when an EDF director opposed to the nuclear plant resigned before the formal vote.
Gérard Magnin said the project was “very risky” in his resignation letter to EDF’s chief executive.
Magnin did not attend the board meeting in Paris on Thursday where EDF’s remaining 17 directors voted. His resignation follows that of EDF’s chief financial official, Thomas Piquemal, earlier this year, which was also linked to concerns about the cost of Hinkley Point C.
Their resignations and the narrow margin in the vote highlights the divisions created by the project.
John Sauven, the executive director of Greenpeace, called Hinkley Point “terrible value for money” for British families but said it had become “too big to fail” for politicians. EDF is 85% owned by the French government.
“Countless experts have warned that for British families this power station will be terrible value for money,” he said. “This is a bitter pill to swallow for hard-up people who have been told that the government is trying to keep bills down while dealing with energy security and lowering carbon emissions.
“Today’s decision doesn’t prove the UK is open for business post Brexit. It just shows the Hinkley deal became too big to fail in the eyes of British and French politicians.
“Theresa May now has a chance to stop this radioactive white elephant in its tracks. She should look at the evidence and see that this deal would be a monumental disaster for taxpayers and bill payers.”
The National Audit Office has warned taxpayers could end up paying more than £30bn through a range of subsidies designed to support the project. In a damning report, the NAO also said there could be potential liabilities for disposing of spent fuel and meeting claims in the event of a nuclear accident, meaning renewable energy sources may be a cheaper option.
The government has agreed a “strike price” – a guaranteed price for the electricity generated by Hinkley Point – of £92.50 a megawatt hour for 35 years. This is more than twice the cost of existing wholesale electricity prices.
But there is also concern in France about the cost of the project. EDF has net debt of more than €37bn (£31bn) and unions representing the company’s workers in France are concerned that Hinkley Point could jeopardise its survival.
The project will be part-funded by China after the China General Nuclear Power Corporation agreed to take a 33% stake in the project. Shareholders in EDF have also agreed to buy €4bn of new shares in the company to fund Hinkley Point C.
However, similar projects in Finland and Flamanville, in France, are years behind schedule and significantly over budget. Areva, the French nuclear group that works with EDF, had to be rescued from bankruptcy by the French government because of the problems in the industry.
In his resignation letter, Magnin wrote: “Let’s hope that Hinkley Point will not drag EDF into the same abyss as Areva.”
Magnin has a background in alternative energies and is the founder of Energy Cities, an association designed to help local authorities move to newer forms of energy. The French government proposed him as a board member in 2014, which was seen as an attempt to encourage the company to invest more in renewable energy.
Business leaders in Britain welcomed EDF’s announcement, saying that new investment in the country’s infrastructure is vital. Josh Hardie, deputy director general of the CBI, said: “The final green light for Hinkley Point is welcome news as now, more than ever, action is needed on key infrastructure projects which attract investment to the United Kingdom.
“The project represents a significant milestone in the United Kingdom’s energy future. It will play a key role in further securing and decarbonising our energy supply, putting us on the right path to a sustainable energy mix.
“We hope it will also help kickstart a new nuclear build programme, creating jobs for tens of thousands of people – not just in the local community but up and down the whole country.”
Hinkley Point has already been beset by delays due to concerns about cost and safety. The government initially gave the green light for new nuclear power stations in Britain in 2006, claiming they would make a “significant contribution” to lowering carbon emissions as polluting coal power stations are phased out.
