• Hollande, May said to have discussed the project privately
  • EDF backs investment Thursday, U.K. has to ratify terms

Prime Minister Theresa May’s silence on the Hinkley Point nuclear power plant is sowing reservations about political support for the biggest Franco-British industrial project in a generation, according to people present at private talks between the two countries’ leaders.

May was noncommittal when she discussed the plan to have Electricite de France SA build the 18 billion-pound ($24 billion) plant with President Francois Hollande on July 21, saying the decision on whether to proceed lies with the French power company, according to the people who spoke on condition of anonymity. The U.K. leader’s caution, which contrasts with the enthusiasm of her predecessor, has prompted Hollande to avoid declaring his own backing for the project in public, people familiar with the matter said.

As the politicians were dithering, EDF gave the project a green light at a meeting in Paris Thursday evening. With the company 85 percent owned by the French state, the ongoing political uncertainty will affect Chief Executive Jean-Bernard Levy’s ability to drive the project forward in coming weeks. EDF still needs the new U.K. government to ratify the contract terms approved by former Prime Minister David Cameron, who resigned last month after the U.K. voted to leave the European Union.

French officials met last week to discuss EDF’s position following Hollande’s talks with May and their debate stretched until about 4 a.m., one of the people said. The two leaders then spoke by telephone on Wednesday night, with Hollande seeking further assurances about the project from May, the person added.

“The U.K. needs a reliable and secure energy supply and the government believes that nuclear energy is an important part of the mix,” Business and Energy Secretary Greg Clark said in an e-mailed statement after the EDF decision. “The government will now consider carefully all the component parts of this project and make its decision in the early autumn.”

Cameron’s then Energy Secretary Amber Rudd said on June 29, “We remain committed to that nuclear program and remain full tilt on Hinkley Point.” Rudd is now Home Secretary.

Opposition to Project

The cold feet on both sides of the English Channel comes at a critical moment for the project. Levy and his teams have lined up billions of euros of contracts with suppliers, agreements that would have to be re-negotiated if the start of construction work were subject to significant delay.

Both governments have to juggle economic and political considerations as they consider Hinkley. For the French, the project will help keep the order pipeline for reactors full, securing jobs and preserving skills in what Economy Minister Emmanuel Macron and others see as a strategic French export industry.

“We back the Hinkley Point project, it’s very important for France, it’s very important for the nuclear sector and EDF,” Macron said in an interview with the BBC in April.

May’s Adviser

At the same time, some EDF unions are resisting the project, fearing that it will strain the company’s cash flow and possibly lead to job cuts. That’s a sensitive issue for Hollande, a Socialist president with his eye on a general election next year. EDF board member Gerard Magnin resigned on Thursday before the crucial meeting citing his opposition to the plan, Agence France-Presse reported.

For the U.K., the two reactors that EDF is planning to build over a decade at Hinkley Point are expected to satisfy about 7 percent of the U.K.’s power demand. They were part of Cameron’s plan to reduce greenhouse gas emissions as the country closes all coal-fired generation by 2025. Yet with electricity prices down and a British government price guarantee, the project hasn’t garnered a political consensus.

Importantly, May’s joint chief of staff, Nick Timothy, wrote last year that he found it “baffling” that the U.K. was allowing Chinese state-owned companies to be involved in such sensitive projects. He floated the idea that the Chinese might build in vulnerabilities that would allow them to shut down British energy production “at will.” May herself hasn’t spoken publicly about the plan since becoming prime minister on July 13.

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