Hinkley Point C subsidy has dealt consumers a bad hand
22nd November 2017 | Commercial Energy
MPs have accused the government of failing to protect consumers over the price it has promised to pay for power from the Hinkley Point C nuclear plant. The Commons public accounts committee said the subsidy contract for Hinkley Point C, agreed in 2016 after years of delays, would hit poorest households hardest.
The power station is expected to cost billpayers £30bn over the length of the 35 year contract, adding £10-£15 to the average household energy bill. But an assessment by the committee conclude that no one in Whitehall was championing consumers’ interests during negotiations with French company EDF Energy.
The final bill for consumers was exacerbated by government not renegotiating the guaranteed power price for fear that EDF and its Chinese partner CGN would walk away from the project, which the MPs said was a questionable assumption.
Hinkley Point C
Officials agreed a price of £92.50 per megawatt hour in 2013, but fossil fuel price projections fell between then and the contract being signed in 2016, pushing the cost to consumers up fivefold from £6bn to £30bn.
At the time the Department of Energy and Climate Change – now the Department for Business, Energy and Industrial Strategy – did not consider ceiling on the guaranteed price, the MPs were told.
Meg Hillier, chair of the group of MPs, said, “Billpayers have been dealt a bad hand by the government in its approach to this project.” The criticism from the committee follows a damning report by the UK’s spending watchdog, the NAO, which found the contract for Hinkley had locked consumers into a “risky and expensive project”.
The NAO attacked the government for failing to explore alternative financing models, such as taking a stake in the project, a criticism that the MPs echoed.
The public accounts committee said it was also disappointed that the government appeared to have no plan in place to maximise the wider benefits of the project, beyond the clean power it will provide.
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