The final decision to go ahead with the plan to build the first new UK nuclear plant in 20 years suffered an unexpected delay yesterday after the Government postponed giving their approval until the autumn despite EDF reaching a decision to back the investment.
EDF board members met on Thursday 28th July in Paris which saw support split. Many voiced their concerns that the investment was too risky for the firm given their financial situation and volume of debt, including Gerard Magnin who tendered his resignation during the meeting. Nevertheless, the remaining board still took the decision to 'approve' the project later that afternoon.
Later yesterday evening however, the French firm, which is financing the majority of the £18bn Hinkley Point project in Somerset, was met with further resistance from the British Government.
The UK's Secretary of State for Communities and Local Government, Greg Clark, said that they would not give the go ahead for the project until at least October. He cited uncertainty about the potential escalating costs and the imminent changes in the UK's energy policy which is forcing the Government to postpone their final decision until they review the current energy plan and whether developments of this nature are necessary.
Mr Clark says they will "consider carefully" before backing the construction of the new nuclear plant.
In the short term, the impact on UK businesses who are renewing their gas and power contracts is likely to be slight although the uncertainty in the UK's support for further investment in nuclear power could see prices increase. In the medium to long term, the potential risk of 'not enough capacity' in the system could lead to higher prices on the back of the UK struggling to meet electricity demand.
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