Brief Hinkley Point C nuclear power station (HPC) is a proposal to construct a 3,200 MWe nuclear power station with two EPR reactors in Somerset, England. The proposed site is one of eight announced by the British government in 2010, and in November 2012 a nuclear site licence was granted. On 28 July 2016 the EDF board approved the project, and on 15 September 2016 the UK government approved the project with some safeguards for the investment. The plant, which has a projected lifetime of sixty years, has an estimated construction cost of £18 billion, or £24.5 billion including financing costs. The National Audit Office estimates the additional cost to consumers under the “strike price” will be £29.7 billion. Financing of the project is still to be finalised, but the construction costs will be paid for by the mainly state-owned EDF of France and state-owned CGN of China. History In January 2008, the UK government gave the go-ahead for a new generation of nuclear power stations to be built. Hinkley Point C, in conjunction with Sizewell C, was expected to contribute 13% of UK electricity by the early 2020s. Areva, the EPR’s designer, initially estimated that electricity could be produced at the competitive price of £24 per MWh. EDF, which is 85% owned by the French government, purchased British Energy, now EDF Energy Nuclear Generation Ltd, for £12.4 billion in a deal that was finalised in February 2009. This deal was part of a joint venture with UK utility Centrica, who acquired a 20% stake in EDF Energy Nuclear Generation Ltd as well as the option to participate in EDF Energy’s UK new nuclear build programme. The project has however been marked by considerable controversy. For example, in February 2013, Centrica withdrew from the new nuclear construction programme, citing building costs that were higher than it had anticipated, caused 7 by larger generators at Hinkley Point C, and a longer construction timescale, caused by modifications added after the Fukushima disaster. By March 2013, a group of UK Parliamentarians and academics, concerned that the ‘talks lack the necessary democratic accountability, fiscal and regulatory checks and balances’, called for the National Audit Office to conduct a detailed review of the negotiations between the Department of Energy and Climate Change and EDF. Following all these, in December 2013, the European Commission opened an investigation to assess whether the project breaks state aid rules with reports suggesting the UK government’s plan may well constitute illegal state aid. Joaquín Almunia, the EU Competition Commissioner, referred to the plans as “a complex measure of an unprecedented nature and scale” and said that the European Commission is “not under any legal time pressure to complete the investigation”. In January 2014, an initial critical report was published, indicating that the UK government’s plan may well constitute illegal state aid, requiring a formal state aid investigation examining the subsidies. David Howarth, a former UK Liberal Democrat Parliamentarian, doubted “whether this is a valid contract at all” under EU and English law. At the same time, Franz Leidenmuhler (University of Linz, a specialist in EU state aid cases and European competition law), wrote that “a rejection is nearly unavoidable. The Statement of the Commission in its first findings of December 18, 2013, is too clear. I do not think that some conditions could change that clear result.” Interestingly, opposition to the project also came from other European countries. For example, in March 2014, the UK Court of Appeal allowed An Taisce, the National Trust for Ireland (in the Republic of Ireland), to challenge the legality of the decision by the UK Secretary of State for Energy and Climate Change to grant development consent. An Taisce lawyers say there was a failure to undertake “trans-boundary consultation” as required by the European Commission’s Environmental Impact Assessment Directive. UK Lord Justice Sullivan said that “he did not venture that it had a real prospect of success, it was desirable that the court should give a definitive view as to whether there should be a reference to the Court of Justice of the European Union and, if not, on the meaning of the Directive”. In July 2014 the UK Court of Appeal rejected An Taisce’s application on the basis ‘that severe nuclear accidents were very unlikely… no matter how low the threshold for a “likely” significant effect on the environment… the likelihood of a nuclear accident was so low that it could be ruled out even applying the stricter Waddenzee approach’. (Opposition from other EU countries did not subside with the failure of the Republic of Ireland to stop the project as in June 2015, the Austrian government filed a legal complaint with the European Commission on the subject of the state subsidies). However, in October 2014, the European Commission approved the project. Although being the case, controversy did not cease with EU approval. In fact shortly after the EU approved the project in October 2014, in December 2014, the UN, under the Convention on Environmental Impact Assessment in a Trans-boundary Context, ordered the UK Department for Communities and Local Government to send a delegation to face the committee on the “profound suspicion” that the UK failed to properly consult neighbouring countries. Political drivers for the project On 8 August 2016, Liu Xiaoming, China’s ambassador to Britain, wrote that the UK risked major power shortages by 2025, the Hinkley Point C project is ready to go ahead, the ‘UK could not have a better partner than the China General Nuclear Power Corporation’, and ‘the China-UK relationship is at a crucial historical juncture’. In August 2016, it was reported that ‘UK civil servants are looking to see if there is any loophole, clause or issue in contracts yet to be signed that allow the Government to pull back without huge loss and while also saving face’, that Beijing ‘will resist any compromise on the deal’, and that one option under consideration is to approve Hinkley Point C but delay a decision on the Bradwell reactor. Successful implementation of the Hinkley Point Point C project suggest that organisations responsible for its delivery will have to develop people, cultural and organisational capacity capable of delivering innovation. Such organisations need to reconsider existing people, culture and organisational norms. This cannot be achieved without reconsidering how the project is conceptualised, designed, led and managed. It needs a re-think of the raft of topics covered in this module. The Infrastructure Planning Inspectorate of the UK Government has appointed a team of consultants –( Your Team) – to advise them on the way project teams in the Hinkley Point project should be led, organised and managed to deliver innovative solutions. after reading please do the following: Creat a critical analysis using the conceptual model above, the challenges and opportunities project team(s) are likely to face in their endeavour to manage the Hinkley Point project. This case study approach is likely to be based on document examination.
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