New nuclear power plant at Hinkley Point C is approved

The first of a planned new generation of nuclear power plants in the UK has been given approval.

Energy Secretary Ed Davey told MPs in the Commons that he was granting planning consent for French energy giant EDF to construct Hinkley Point C in Somerset.

The proposed £14bn power plant would be capable of powering five million homes.

Mr Davey said the project was "of crucial national importance" but environmental groups reacted angrily.

The building of Hinkley Point C is expected to pave the way for a fleet of new plants across the UK.

It is estimated the project will create between 20,000 and 25,000 jobs during construction and 900 permanent jobs once in operation.

BBC industry correspondent John Moylan said the power plant would cost more than the London 2012 Olympics.

Mr Davey told the Commons: "The planning decision to give consent to Hinkley Point follows a rigorous examination from the Planning Inspectorate, and detailed analysis within my department.

"This planned project adds to a number of new energy projects consented since May 2010, including wind farms and biomass and gas-fired power stations.

"It will benefit the local economy, through direct employment, the supply chain and the use of local services."

The news is a boost to the nuclear industry following a series of setbacks in plans to construct a new fleet of reactors in the UK, which ministers say are needed to cut carbon and keep the lights on.

EDF says the project would generate taxes equivalent to a few percentage points of what the entire financial sector yields for the exchequer.

The energy giant is negotiating with ministers over what it can charge for the electricity Hinkley generates for decades to come.

Mr Davey said discussions on the strike price were ongoing, but he expected them to be concluded shortly.

EDF chief executive Vincent de Rivaz said "intensive discussions" were taking place.

He said: "To make this opportunity a reality, we need to reach agreement swiftly... It must offer a fair and balanced deal for consumers and investors."

Shadow energy secretary Caroline Flint welcomed the decision to grant planning consent.

"Today's announcement is an important milestone in the development of new nuclear build in the UK," she said.

"I am pleased to welcome it and reiterate our support for nuclear power alongside an expansion of renewable energy and investment in carbon capture and storage as part of a clean, secure and affordable energy supply for the future."

However, environmental groups have reacted angrily.

They raised concerns over the potentially high price for electricity the government will agree to in order to get the nuclear plant built, and over the issue of nuclear waste.

Greenpeace executive director John Sauven said: "It will lock a generation of consumers into higher energy bills, via a strike price that's expected to be double the current price of electricity, and it will distort energy policy by displacing newer, cleaner, cheaper technologies.

"With companies now saying the price of offshore wind will drop so much it will be on par with nuclear by 2020, there is no rationale for allowing Hinkley C to proceed."

Friends of the Earth's Policy and Campaigns Director Craig Bennett said: "The only way this plant will be built is if the government hands over a blank cheque from UK taxpayers to French developers, EDF.

"The most cost-effective way to cut carbon and keep the lights on is a combination of energy efficiency and investing in renewables."

Hinkley C would be one of the UK's biggest infrastructure projects for years with 5,600 workers on site at the peak of construction.

Unite's national officer for energy Kevin Coyne, said the decision to grant consent was a "massive boost for jobs".

But Dr Tim Fox, head of energy and environment at the Institution of Mechanical Engineers, warned of a potential shortage of skilled engineers needed to build the plant.

"More needs to be done to increase the number of people choosing engineering as a career to overcome a skills shortage," he said.

"Over the next 10 years, the UK needs to be recruiting about 87,000 engineers a year, but worryingly we are currently producing just 46,000 engineers a year."

Hinkley Point C will be the third nuclear plant at the site.

Hinkley A, which is now being decommissioned, began generating in 1965 and was closed down in 1999. Hinkley B, which started generating in 1976, is due to be turned off in 2023.

The last nuclear plant built in the UK was Sizewell B in Suffolk. Building work for the plant, near Leiston, began in 1988 and it started operating seven years later.