Speech: Vincent de Rivaz on Hinkley Point C
This morning Vincent de Rivaz, EDF Energy's CEO, gave a speech at Dungeness in which he set out the arguments in favour of investment in Hinkley Point C.
I am very pleased to be here with you all today. Thank you for joining us.
We are here to celebrate a great milestone.
In August 2012, EDF Energy began to re-open visitor centres at our generation sites, with the first at Hunterston.
We did this to engage in dialogue with the public about our power stations and how they work.
To shine a light on what we do.
And to increase understanding of nuclear power in this country.
I am very pleased that, in just three years since 2012, we have now hosted 100,000 people to all of our visitor centres.
That means that 100,000 people have learnt more about where their electricity comes from…
…as well as seeing how our nuclear power stations operate…
…and what the fantastic, expert, people running the stations do every day.
It means tens of thousands of children being inspired by their visits to our sites and to our mobile visitor centres.
A future generation of scientists and engineers better equipped to understand the low carbon economy.
I am very grateful to all of the staff at Dungeness and our other Visitor Centres…
…who do such an excellent job.
While the visitor centres at all the stations have played their part in welcoming our 100,000 visitors, I am delighted to be at Dungeness to celebrate the milestone. Dungeness is delivering a very strong operational performance, including on electricity output, safety and the recent successful outage.
That is down to the dedicated men and women working here and I am delighted to spend the day with them. Later today I will meet and thank five colleagues who have completed 40 years’ service at the station.
The need for transparency in nuclear
At EDF Energy, transparency is at the heart of everything we do.
It is our responsibility, as the custodians of Britain’s nuclear fleet, to be transparent, open and receptive to questions.
The visitor centres give the public the chance to know the facts and to challenge lazy thinking and fallacies.
And to encourage us to be a listening, learning company. A company which shows humility and leadership.
Transparency over Hinkley Point C
So as we celebrate the success of these centres, and in the spirit of transparency, I want to address some wider issues.
We are approaching the Final Investment Decision for our new nuclear project Hinkley Point C.
As we do, scrutiny has naturally increased.
Just as we embrace transparency, we welcome scrutiny. We relish challenge based on facts.
Be in no doubt – Hinkley Point C is a vast undertaking.
Britain’s first new nuclear power station for a generation.
It will provide 7% of the UK’s electricity needs and generate reliable, low carbon electricity for 60 years.
New nuclear is good for Britain and Hinkley Point C is the first step in the journey.
So we need to get it right.
The project has faced rigorous scrutiny …
…from Government – including the Chancellor and the Secretary of State
…from , Parliament the European Commission, the regulator, the unions…
…from our workforce, suppliers, customers, partners and many other stakeholders…
It has helped us to improve our plans and bring us to the brink of a Final Investment Decision.
This analysis has been conducted through a rigorous, comprehensive and exhaustive set of processes which has taken the best part of a decade.
The processes are led by responsible and accountable people who concluded that it is an investment which Britain needs and that it is based on a good deal and a strong project.
The revival of new nuclear benefits from the continuous commitment of three Prime Ministers and eight Secretaries of State. They have shown courage, conviction and vision.
And it has had the consistent support of the British public.
It is right for everyone to have their say.
But it is important to give due account to the weight and rigour of the processes conducted by accountable people over the past decade to get us to where we are today.
Short-term events have not changed the long-term case on which this project was based and its price deemed fair. The market price today is similar – even if it has decreased a little - to where it was two years ago when the price for Hinkley point C was agreed and welcomed.
Yet it seems to me that great infrastructure projects in this country often face scepticism in the final stages of development. It happened to Crossrail, the Channel Tunnel and Heathrow’s Terminal 5.
For me, this is a great pity. Britain’s infrastructure would be all the weaker if its leaders had allowed the doubters and procrastinators to derail those projects.
The moment when we move from discussion and rhetoric into delivery is the time for courage and leadership.
So in that spirit, and in the interests of transparency, let me address the challenges that have been raised in recent days.
Q1: Do we need new nuclear stations?
Let me be clear.
To its credit the UK has set out plans to take a leading role in tackling the causes of climate change.
Governments of all major political parties have set out their objective to deliver a system of low-carbon energy that brings security of supply at an affordable cost.
This objective is the result of democratic processes. And thanks to the process we have a framework in place to make it possible.
The fundamentals are compelling.
20% of the UK’s generating capacity has closed since 2010. A further 35% will close by 2030.
£100 billion of investment is required.
We are about to secure £16 billion of this £100 billion of investment. That is crucial to give confidence that the country can secure the remaining £84 billion.
To its credit, the Government has consistently recognised the significance of the situation.
It has recognised that to meet the UK’s legally binding emissions targets, a large amount of this new capacity must be low-carbon.
Nuclear power is needed as the base of this system.
People talk about baseload power. It is jargon and I do not like jargon. What it means is the base, the foundation, of the system. Without this foundation the complex web of generation and distribution which makes up our electricity system does not work.
We cannot have a system which is a house of cards.
Low carbon intermittent renewables need a stable low carbon base. Gas - which is needed to meet peaks in demand but which generates carbon - needs a low carbon base.
Only nuclear can provide this reliable, low carbon foundation.
We need electricity constantly. Nuclear provides electricity constantly: Day. Night. Winter. Summer.
In short, it is reliable.
And it will last. Hinkley Point C will generate electricity for 60 years. In that time windfarms and gas plants built now will be replaced, by more efficient, future versions of renewables and gas. Storage and smaller reactors are not available now but may come on line later.
All that can only happen because the base of the system remains.
In short nuclear does not stop innovation. It enables innovation.
Furthermore, it means that renewables can be delivered in a cost effective way. A mix which relies only on renewables for low carbon electricity is one which will produce surplus electricity, with all the additional cost that brings.
Q2: Will it be on time?
The second – related - question is timeliness
People have said that because Hinkley Point won’t come on line when we originally said it would, it is too late.
Incidentally – these are often the same people who say that we should delay the decision, rethink the approach, wait to see what new technology might come along.
In fact Hinkley Point will come in time. Not too early, not too late. When it arrives it will be welcome and it will be needed.
But we don’t have the luxury of waiting. In a few short years, Britain will need Hinkley Point C, and we are on track to deliver for when it does.
I acknowledge that we will have taken longer than we originally thought. But in the scale of this investment – 60 years of operation – we have to focus on the main points:
Will it be there when the country needs it? Yes it will.
Will it be on cost and on schedule? Yes it will.
Will it be safe in construction and operation? Yes it will.
Third question is cost.
Some people say that the British taxpayer is getting a bad deal.
I want to be very clear.
It is a good deal.
It is affordable and fair.
Some critics have compared the strike price to the current electricity price. The price today is not a relevant comparison to the electricity Hinkley Point will produce in decades to come.
Today’s market price depends on fossil fuels and ageing plants. Our project will ensure we don’t need to continue to depend on them in the future.
It is competitive with other forms of generation, including gas, when it is compared - as it should be - with projected mid-2020s prices.
New nuclear in the future energy mix will save consumers around 10% on their electricity bills compared to other low carbon options.
And remember the contract is a two-way deal: When the market price is above the strike price, consumers are protected.
Q4: The EPR?
The fourth question: is about the technology for Hinkley Point C. The EPR reactor.
Again, I want to be clear.
Our project is based on proven technology.
Britain is buying the best and the safest.
The EPR is a Pressurised Water Reactor with the highest safety standards that society rightly demands. We run 58 PWRs in France and there are 277 around the world.
Thanks to the visionary investment made 40 years ago France now has among the cheapest electricity in Europe.
Hinkley Point C will be the fifth and sixth EPRs worldwide.
It is true that there have been delays at Flamanville. The experience gained there - and at Taishan in China - will be immensely valuable when we come to Hinkley Point C.
And for the UK we have a design which is stable: We are sure of what we will build before we begin construction.
It was approved by the UK regulator following a four-year year assessment which included 850,000 hours of engineering studies. The EPR is the only new generation reactor design which has completed this process.
Hinkley Point C is the first of its kind in the UK. It won’t be the last. It will be followed by the two EPRs we plan to build at Sizewell C.
Our experience will ensure that this technology – which has been through a teething and somewhat challenging period – will mature to deliver its full potential for the UK and around the world.
And once we have opened the door to this new generation of nuclear stations in Britain, the cost will fall for other new projects – including our EPRs at Sizewell C.
And of course other countries around the world are interested in having the EPR.
Q5: Can EDF deliver?
The final question is: Can EDF and our Chinese partners deliver?
Hinkley Point C is set up for success.
In addition to experience from earlier projects and the stable design, it benefits from:
Our highly experienced international team and disciplined project approach.
Clear responsibilities, strong controls and realistic cost and time estimates.
and Contractors who have been involved from the very early stages to the project, ensuring efficient project planning.
Hinkley Point C also benefits from the fact it has achieved planning consent.
This is a major undertaking in its own right. It is one part of the comprehensive work that that has contributing to ensuring Hinkley Point C is set up for success.
Consent was achieved only after three years of in-depth community consultation…
…55,000 pages of detailed evidence …
…A year-long rigorous examination by the Planning Inspectorate
…And review and approval by the Secretary of State.
So today I say with full confidence:
Hinkley Point C is not just the best available option.
It is necessary to meet Britain’s energy needs.
The first of a number of new nuclear power stations…
Low-carbon energy for 5 million homes…
A reliable base for a low carbon electricity system for 60 years…
Which combined with Sizewell C will avoid the same carbon emissions as taking nearly one third of the cars off the roads…
At a fixed, competitive price which protects consumers if electricity prices rise above it.…
With direct benefits of 25,000 jobs, 1,000 apprenticeships, 60% of the construction value going to UK companies.
When it comes to nuclear power, transparency is the right approach.
It is why we opened these fantastic Visitor Centres.
It is why so many people have come here to talk, learn, understand, and be inspired.
And it is why it is important to be clear about Hinkley Point C.
It is the right technology, at the right price, at the right time.
And it is crucial to the affordable, secure, low-carbon energy for the UK’s future.
So as we celebrate the success of our Visitor Centres at EDF Energy’s existing nuclear sites…
…we look to the future of new nuclear power in this country with confidence and pride.