Friday 13 May 2016 9:22 am

Thatcher’s former energy secretary Lord Howell warns of China’s secret plan for Hinkley

Margaret Thatcher's former energy secretary has warned that China has a secret plan to build two nuclear reactors on the Hinkley site if French utility giant EDF's controversial £21bn project falls through.

Speaking in the House of Lords last night, Howell said: "Is my noble friend aware that the Chinese also have a plan B, which is to bypass EDF altogether and to build two small reactors on the Hinkley C site, and to do it rather quicker than the present Hinkley C plans?".

It came as credit ratings agency Moody's downgraded the state-owned company, saying that its plan to weather the tough trading environment didn't go far enough.

“The rating downgrade reflects Moody's view that the group's action plan announced on 22 April 2016 will not be sufficient to fully offset the pressures resulting from a low power price environment combined with a significant investment programme," Paul Marty, vice president and senior credit officer at Moody's, said.

EDF said yesterday that the project could cost nearly £3bn more than the £18bn it had planned, while the start date could be pushed back to the first half of 2026.

Last week, it emerged EDF’s former chief financial officer had fought for the final investment decision on the nuclear plant to be delayed by at least three years.

“In January 2015, I proposed to negotiate a three-year delay with our client because we reasoned that it would weigh too heavily on EDF’s balance sheet,” Thomas Piquemal told a French parliament committee hearing.

“Who would bet 60 to 70 per cent of his equity on a [European pressurised reactor] technology that has not yet proven that it can work and which takes 10 years to build.”