Hinkley plant could cost 30 billion
23rd June 2017 | Commercial Energy
Britain’s deal with EDF to build the Hinkley Point C nuclear plant is risky and could lead to requests for more cash and electricity payment top-ups worth 30 billion pounds, a parliamentary watchdog has said.
“Delays have pushed back the nuclear power plant’s construction, and the expected cost of top-up payments … has increased from 6 billion pounds to 30 billion pounds,” the report from the National Audit Office (NAO) said.
The ANO is publishing its report just as the government has committed to help to curb energy costs as part of its new policy objectives. Hinkley Point C is Britain’s first new nuclear plant to be built in decades. It has been plagued by delays and criticised for its guaranteed price for electricity, which is higher than current market prices.
EDF’s UK arm, EDF Energy, is building the 8 billion pound plant in southwest England with China General Nuclear Power Corporation (CGN), which has a 33.5 per cent stake. Britain awarded the project a minimum price guarantee of 92.5 pounds per megawatt hour (MWh), inflation linked, for 35 years. Under the contract, the government will pay the difference between the wholesale electricity price and the minimum it has promised – so-called top-up payments.
British spot wholesale electricity prices have fallen since the deal was struck in 2013, and currently trade around 40 pounds per MWh. A spokeswoman for the Department for Business, Energy and Industrial Strategy (BEIS), said the project would ensure nuclear is part of a diverse energy mix in Britain.
“Consumers won’t pay a penny until Hinkley is built; it will provide clean, reliable electricity powering six million homes and creating more than 26,000 jobs and apprenticeships,” she said.
The plant, which EDF initially promised would be powering ovens to cook Briton’s Christmas dinner in 2017, is expected to start generating electricity in 2025.
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