Hinkley Point contract is signed

Artist impression of Hinkley Point C building proposals

The government and French energy giant EDF have signed the key contract for the new £18bn Hinkley Point C nuclear power station.

EDF boss Jean-Bernard Levy joined officials from the UK, France and China at the behind-closed-doors ceremony in London on Thursday.

Earlier this month, the government gave the go-ahead for the plant which will power nearly six million homes.

It will be the UK's first new nuclear plant in a generation.

The meeting was a second attempt at finalising the deal after Prime Minister Theresa May unexpectedly announced in July that she wanted time to scrutinise it.

With her approval now granted and the contracts updated, the formal signing took place at a ceremony attended by Business Secretary Greg Clark and French Foreign Minister Jean-Marc Ayrault.

China's National Energy Administration director, Nur Bekri, and the chairman of Chinese firm CGN, He Yu, also attended.

Mr Clark said that signing the contract was a "crucial moment" and that Hinkley played "an important part in ensuring our future low-carbon energy security".

Mr Ayrault said he was pleased that the UK government had decided to go ahead with the project.

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Dozens of contracts running to thousands of pages for the huge project in Somerset are believed to have been prepared ahead of the event.

The key document is the Contract for Difference, or CfD, which gives a guaranteed price for the electricity Hinkley will generate for 35 years.

In return EDF, along with CGN, will finance the project and shoulder the risk of any delays.

Critics say the guaranteed "strike price" - which is more than twice the current wholesale cost of electricity - will provide a windfall for EDF for decades to come.

The formal go-ahead for Hinkley also cements China's foothold in Britain's nuclear industry.

The last government signed a series of co-operation agreements in civil nuclear power with Beijing which opened the UK's market to Chinese firms.

CGN will pay about a third of the cost of Hinkley. Under its agreement with EDF, it will also have a stake in a new plant at Sizewell in Suffolk.

The Chinese will then be allowed to develop their own reactor technology at Bradwell in Essex, subject to planning and regulatory approvals.

Delays

The government is now expected to publish some of the key documents linked to the deal. These will include the Contract for Difference and the waste transfer agreement that covers nuclear waste generated by the plant.

After numerous delays, EDF's board agreed to proceed with the controversial project back in July.

But just weeks after taking office, Prime Minister Theresa May ordered a review of the deal, leading to questions over the UK's openness to foreign investment.

Her government gave its approval two weeks ago on condition that it could prevent EDF from selling its controlling stake before completion of the project.

EDF's board approved the new terms on Tuesday, paving the way for the formal signing of the deal.

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