6th Apr 2014

Hinkley Point C: Commercial Terms Agreed

A comprehensive set of agreements have been reached between EDF Group and the UK Government including in principle the key commercial terms for an investment contract of the planned Hinkley Point C (HPC) nuclear power station.

The go-ahead has been given to construct two EPR reactors at HPC in Somerset and the agreement in principle, on the scope of the scheme and on the key terms of the investment contract , allows EDF Group to move ahead to secure partners for the financing of the project.

Contained within the commercial terms is an agreement on a “strike price” that will be fair and balanced for both consumers and investors. It means HPC will offer stable and predictable prices through a “Contract for Difference”. So, if wholesale prices rise above the agreed “strike price”, consumers will not pay extra and if they fall below this price, the generator will receive a top-up payment. Customers pay nothing until the power station is operational.

Preliminary works for the project are already well advanced, with a design approved by UK regulators, a nuclear site licence in place and planning permission being given for construction.

Key terms of the contracts for the four most important suppliers to the project have now been finalised subject to a final investment decision. These are with: Bouygues TP/Laing O’Rourke for the civil work contract, Costain for the marine work, Alstom for the turbines and Areva for Instrumentation and Control, Nuclear Steam Supply System and Fuel.

Redhall has strengthened its position to take advantage of the opportunities within the UK nuclear new build programme, by setting up strategic alliances with French companies ACPP and Baumert. The ACPP-Redhall joint venture primarily focuses on the design, manufacture and installation of the stainless-steel pond liners, tanks and sumps required. The commercial Heads of Terms agreement between Redhall and Baumert – a subsidiary of the French organisation Groupe Gorgé – will facilitate a turnkey package offering that includes design, manufacture and installation for shield and security doors used in nuclear power stations.

Finalisation of the agreements and construction of the plant are subject to a final investment decision. The Government and EDF Group will work together to address the remaining steps which must be taken before that decision can be made.

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