Tata today, EDF tomorrow?

“At Talbot the government appears to have assumed, even at the eleventh hour, that Tata would not dare to walk away from its UK steel business. It was a bad bet, thus the undignified scramble to get the business secretary back from Australia to explain what government intervention in the steel industry might mean, and cost.

But let’s not ignore the other industrial drama involving vast sums, thousands of jobs and a key plank of government strategy. Yes, it’s Hinkley Point, where the UK’s energy policy for the 2020s rests on the premise that French state-backed outfit EDF really will build a £18bn nuclear station in Somerset that will open in 2025 to supply 7% of our electricity.

This bet is looking weaker with every passing week. In the latest instalment, a group of EDF engineers have written a paper arguing that 2027 is the earliest “realistic” opening date. Meanwhile, EDF’s board has not been able to bring its rebellious unions to heel. As we report, Christian Taxil, an employee board member representing the CFE-CGC union, has called for the project to be postponed.

EDF can – and did – dismiss these tales as fluff. The engineers’ paper was not taken to the board, the company argues, and unions’ opposition to Hinkley is long-standing.

The UK government, on the other hand, cannot afford to be so blasé. EDF’s ability to give a final thumbs-up on Hinkley rests on the French government’s willingness to refinance the company. French ministers may not be so relaxed about the latest outbreak of dissent in EDF’s ranks. Come May, the latest “deadline” for a final investment decision, nobody can be truly confident about what will happen.

If the result is abandonment, the UK government cannot plead it wasn’t warned. Hinkley’s chief obstacle has always been simple and formidable – the fact that its European pressurised reactor design is unproven and similar projects in Normandy and Finland are years behind schedule. It would not be surprising if the project expires from exhaustion.

The key requirement for the UK is to have a plan B. The good news is that it should not be difficult to design an alternative energy strategy to meet the capacity crunch in the 2020s; it could be more gas-fired stations, or smaller and proven nuclear reactors. The bad news is that there little to suggest ministers are on the job.”

http://www.theguardian.com/uk-news/nils-pratley-on-finance/2016/mar/30/port-talbot-is-a-big-problem-but-so-is-hinkley-point