The news pages this week have been full of contradictory stories about the planned Hinkley C nuclear power station – a sure sign that a big fight is raging.

First came reports that the that the UK government is “under pressure to abandon plans to construct UK’s first nuclear reactor for more than 20 years” in the Independent.

HSBC has produced “a damning report into the viability of the project”, it said. The Hinkley Point C plant in Somerset was “becoming harder to justify”, the bank’s financial analysts wrote, concluding: “We see ample reason for the UK Government to delay or cancel the project.”

According to Business Green, the HSBC report “warns the cost of the agreed price support will rise if wholesale electricity prices remain low, backs National Grid predictions UK energy demand will continue to fall, and raises concerns about the Europe nuclear industry’s track record for delivering new reactors on time and on budget.”

Giving this weight is that HSBC had been acting as an advisor to the £16bn project as reported by Bloomberg – meaning that they already have the inside track on the project and all its inconvenient secrets.

But then the deal is to be signed ‘within weeks’

Next thing, the Guardian reported that a deal with China to build the world’s most expensive ever nuclear plant “should be finalised within weeks”.

More accurately the headline should have read ‘months’. “David Cameron and China’s president Xi Jinping are expected to sign the deal at a meeting in the UK in October”, according to the newspaper.

“More than two thirds of the upfront investment costs for the controversial project will be provided by two Chinese companies. Beijing is keen to secure a greater stake in further nuclear power plants.”

In fact, of course, it’s nothing like that simple. The deal on the table is between the UK Government and EDF – and it’s not been signed. An added complication is that the company making the reactors for EDF, Areva, is close to bankruptcy.

On top of which the reactor vessel forged by Areva subsidiary Le Creuset for an identical reactor at Flamanville has severe metallurigical faults and may have to be scrapped. Areva has already cast the two reactors destined for Hinkley C and they may well have to be scrapped too. Also one of the reactor lids is being sacrificed for destructive testing.

Meanwhile heavy wrangling is going on between the two French state-owned companies, and the two Chinese state-owned companies hoping to get involved. The Chinese companies want to do much more than finance the deal – they want to get deep into the supply chain. Which is not what the French have in mind at all.

Nor is it what the British government has in mind – after commiting to a subsidy package independently estimated at €108 billion (£76 billion) they want most of the contracts to go out to British firms, not French or Chinese ones.

Maybe all this explains why it is that the government has so far spent £1.3 million on legal fees to the law firm Slaughter & May, as uncovered by Greenpeace Energydesk.

‘Good news’ planted by EDF?

A clue as to what the Guardian’s story is all about is lurking further down the Guardian article: “Sources at EDF confirmed it expected to see contracts signed in the  early autumn.”

Which strongly suggests that the story is the result of some heavy EDF spinning – doubtless in response to the negative coverage about the HSBC report and other bad news afflicting the Hinkley C project.

As part of its media offensive, EDF has also put the word out that it is placing £1.3 billion in contracts to the mainly UK based contractors, giving EDF boss Laurent de Rivaz the chance to claim that

“Hinkley Point C will be at the forefront of the revitalisation of the UK’s industrial and skills base, and we have worked hard to build a robust supply chain to support new nuclear in the UK. The project will boost industrial stamina in the UK and kick-start the new nuclear programme.”

So what’s the real situation? For a start, it would be extremely unwise for the UK to commit any serious money to the Hinkley C project until:

• There is a single example of a working reactor of the EPR design chosen for Hinkley C; currently all projects are running desperately late and over budget.
• Legal challenges in the European Court to the £76 billion subsidy package from the Austrian government and green energy suppliers have been safely put out of the way – something that’s a few years off at the very least, even if they fail – which they may well not.

So until both of those major obstructions are out of the way, it’s hard to imagine any meaningful deal being signed. But could the government now have turned against the project altogether?

‘One of the worst deals ever for British households and British industry’

A whisper in the wind comes from Lord Howell, former energy minister, who also happens to be father in law to George Osborne, the Chancellor. Speaking last month on the Energy Bill in the Lords, he made the startling statement that:

“By far the biggest obligation, or future burden, on consumers and households is the Hinkley Point C nuclear project. I am very pro nuclear and pro its low-carbon contribution but this must be one of the worst deals ever for British households and British industry.

“Furthermore, the component suppliers to EDF are in trouble, costs keep rising, no reactor of this kind has ever been completed successfully, those that are being built are years behind and workers at the site have been laid off, so personally I would shed no tears at all if the elephantine Hinkley Point C project were abandoned in favour of smaller and possibly cheaper nuclear plants a bit later on.”

Could Lord Howell’s unusually strongly worded views have been reflecting those of the Chancellor himself, as George Osborne (by new means a stupid man) gasps at the prospect of commiting so vast a sum of public money to such an obviously hazardous project?

Lord Howell concluded his nuclear remarks by saying: “A far better hope lies with the Japanese nuclear plants at Wylfa and Moorside. The Japanese can build quicker with more tested and reliable reactor designs, and, because of cheap gas for years to come, we will not need them so soon anyway.”

All of which makes it look as if the mood in government is increasingly towards bypassing the Hinkley C project and its failed EPR design altogether, and going stright for the more affordable AP1000 design (which does however have problems of its own). And EDF is desperately fighting back .

Will a Hinkley C  deal be signed between David Cameron and Xi Xinping in October? Very possibly there will be signatures on a piece of paper. Will Hinkley C ever be built? The smart money says no.

Oliver Tickell edits The Ecologist.