‘First of a kind’ nuclear deal struck


‘First of a kind’ nuclear deal struck

The government has struck a deal with French utility operator EDF to build a £16Bn nuclear power plant at Hinkley Point, Somerset, that will create 5,500 construction jobs at its peak, including 1,000 engineering and other construction professionals.


The 35 year deal guarantees EDF a price almost double the current market price of power, index linked to consumer prices. A ‘gainshare’ agreement will ensure that if construction costs are less than budgeted the benefit will be shared.


The Hinkley agreement raises hopes that other nuclear construction deals will now start to come forward. EDF is in talks about building another nuclear plant, Sizewell C, which would bring down the level of subsidy. Hinkley is recognised as being a ‘first of a kind’ nuclear power station, and costs would come down for subsequent projects.


Two Chinese state owned companies – China General Nuclear Power Group and China National Nuclear Corp – have been given UK government clearance to invest in the project, as has French nuclear developer Areva. The deal also covers eventual decommissioning of the plant as well as nuclear waste management.

Contractors and other suppliers have been on standby while negotiations dragged on for over a year about the level of support the UK would offer. Some major contracts have already been awarded, but mobilisation has been slow while EDF and the government negotiated.


Laing O’Rourke and Bouygues, for example, have already been awarded main civil engineering contracts worth some £2Bn and Costain has been awarded a £250M marine works contract. Bam Nuttall and Keir have a £100M earthworks contract.


Tenders will be out early next year for electrical and mechanical packages, with the main turbines contract award to be made before the end of this year.