INSIGHT: Editor’s Week: nuclear reaction to Hinkley

After years of waiting, this week EDF brought its beleaguered Hinkley nuclear project to the brink of a final investment decision. China’s state visit to the UK brought a flurry of business agreements, but key amongst these is the deal signed between Chinese nuclear developer CGN and EDF to deliver the Hinkley and Sizewell B nuclear projects. Although potentially lucrative in the long-run the high capital investment and potential for costly delays could prove challenging for EDF.

Meanwhile in the water sector challenges this week have revolved around staffing issues. United Utilities (UU) is the latest water company to face industrial action over a pensions dispute. Elsewhere, Severn Trent will lose a senior manager to Business Stream, which in turn is poised to let 14 customer service employees migrate to Scotland’s newest public sector supplier, Anglian Water.

Nuclear reaction

Under the Hinkley project deal struck this week, China’s CGN will take a 33.5 per cent stake in the £18 billion development costs as part of a wider deal which paves the way for the Chinese nuclear firm to develop a second new nuclear plant at Sizewell and a nuclear plant of their own design in Essex in which it will take a two thirds stake.

Construction is due to begin “within weeks” and EDF is expected to dispose of assets worth as much as €10 billion in an effort to shore up reserves ahead of the capital intensive Hinkley Point nuclear development project before its £92.50/MWh subsidy revenue comes streaming in.

While the developers and top government ministers have welcomed the deal, the investment community is clear-eyed about the size of the challenge EDF will face to control the costs of the project. Costs are a concern to green groups too following the heavy cuts to renewable energy support which came just weeks before the deal.

Water works

UU is the latest water company to potentially face industrial action from its staff over a pension dispute. Trade union members are meeting in Sheffield and are considering UU’s proposals to close its defined benefit pension scheme for active members from the end of March next year.

And as some staff are up in arms, others are up and leaving. Anglian Water Business (AWB) is set to take on up to 14 Business Stream employees as it prepares to supply the Scottish public sector. The staff are set to move under transfer of undertakings (TUPE) rules, which aim to protect employees’ rights when the organisation or service they work for transfers to a new employer – in this case AWB.

But Business Stream still has something to celebrate as news broke this week that it has poached Severn Trent Water expert Dave Allin to join its senior team as head of solutions. The firm said it hoped the appointment would “strengthen” the company’s leadership ahead of the opening of the English water market in 2017.