New Development for Hinkley Point C

United Kingdom

New development

On Thursday, 15 September 2016, the Department for Business, Energy & Industrial Strategy announced  that a “revised agreement” had been reached with EDF and that Government has decided to move forward with the new nuclear power station at Hinkley Point C, and direct the Low Carbon Contracts Company to offer a Contract for Difference to EDF.


Hinkley Point C is thought by Government as critical to keeping GB’s ‘lights on’ and reducing carbon emissions. Currently, the UK has eight power stations which generate around 20% of power in the UK and almost all of these existing power stations are due to close by 2030.

Hinkley Point C is expected to meet approximately 7% of domestic electricity demand for 60 years and therefore is of critical importance to Government for securing security of supply.

New agreement in principle with EDF

The new agreement in principle with EDF provides:

  • Government will be able to prevent the sale of EDF’s controlling stake prior to the completion of construction, without the prior notification and agreement of ministers.
  • Existing legal powers, and the new legal framework, will mean that the Government is able to intervene in the sale of EDF’s stake once Hinkley is operational.

This agreement in principle reflects the concern that Government continues to have in relation to the ownership and control of critical infrastructure such as nuclear power stations.
New Legal Framework

It is stated that government will impose a new legal framework for “future foreign investment in Britain’s critical infrastructure”, which will include nuclear energy and apply after Hinkley.

a. Special share held by Government

The new legal framework will mean that after Hinkley, the Government will take a “special share in all future nuclear new build projects”. This mechanism is to ensure that significant stakes in critical infrastructure cannot be sold without the approval of Government.

b. Notice requirements on change of ownership

The new legal framework will also provide for the Office for Nuclear Regulation (ONR) to be directed to require notice from developers or operators of nuclear sites of any change of ownership or part-ownership.

This would assist in the Government being able to monitor ownership of nuclear sites. It would also allow Government to advise or direct the ONR to take action to protect national security.

c. Increased Scrutiny of Foreign Ownership and Control

The new legal framework will provide for reforms to the Government’s approach to the ownership and control of critical infrastructure such a nuclear power stations.

It is stated that this will ensure that the full implications of foreign ownership are scrutinised for the purposes of national security. This will include a review of the public interest regime in the Enterprise Act 2002 and the introduction of a national security requirement for continuing Government approval of the ownership and control of critical infrastructure.

This reflects that the Government is keen to promote foreign investment in the domestic economy whilst also balancing the impact that the loss of any control over critical infrastructure may have.