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Hinkley Point operators EDF may get 40-year Government deal

By Western Daily Press  |  Posted: February 20, 2013

  • Hinkley Point power station overlooking the Bristol Channel. Photo: Skyscan/Photo Science Library

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The Government looks set to give nuclear power companies contracts guaranteeing subsidies for up to 40 years, as the pressure to keep Britain’s lights on intensifies.

French energy giant EDF is awaiting planning approval to build the first of Britain’s new generation of nuclear reactors at Hinkley Point in Somerset, but its hoped-for partner, British Gas owner Centrica, dropped out two weeks ago, citing the increasing anticipated project costs and timetable.

EDF’s own final decision to go-ahead depends on the “strike price”, the guaranteed minimum price that companies will receive for generating nuclear power. The Government has yet to announce the figure but The Guardian said yesterday it has learned ministers are proposing to extend contracts from the 20 years originally envisaged to at least 30 or possibly 40 years, to keep the price per megawatt hour below the crucial £100.

The reports have prompted an outcry. Cheltenham Liberal Democrat MP Martin Horwood accused the Government of being prepared to hand a French state-owned nuclear energy company billions of pounds from British energy bills into a distant future in which nuclear will be old hat.

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“It is ludicrous. Renewables should be playing a major part by then. If we are still subsidising nuclear at that stage I think it would be completely unacceptable,” he said.

The coalition agreement reached between the Conservatives and Liberal Democrats in 2010 promised that nuclear power stations would be built only if the industry got no public subsidy, but slippage in the energy programme and uncertainty over investment in nuclear has led to a change of heart. Now the Government talks of: “no unfair subsidy.”

Mr Horwood, who has led criticism of nuclear power, and particularly of subsidies, in the House of Commons said: “Our party has always been against nuclear power. We abstained on the Coalition nuclear policy statement. It is essentially a Conservative policy brought to the Coalition to support nuclear power, but what this is about is whether subsidy is justified. You are subsidising one big player in an industry that has been around for 50 years. Renewables represent a new, emerging industry with lots of different competitors who are trying to become more efficient. Subsidies for renewables in a competitive market are different.”

EDF said it was working with the Government to agree “a fair price balanced for consumers and investors.”

It said it was working hard to help meet the energy challenge facing the UK. It has recently extended the life of two more of its eight nuclear power stations – at Hinkley Point B and Hunterston in North Ayrshire – by seven years. They would be able to meet the electricity needs of more than two million homes until 2023, EDF said.

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  • Ted_F  |  February 20 2013, 4:37PM

    Response to Peter Lansdown: No large scale system of power generation is safe, there is a need to balance safety against factors like base load reliability. We depend on power 24/7 and currently(!) get it through conventional power plants; the Grid can tolerate plants going down for maintainance, it couldnot (in a 100% renewable context) tolerate windless, sunless days. The UK's electrical energy need is some 2,400 Terra Watt hours. Renewables supply about 5% of that. You could have windfarms covering every square metre of the nation and every roof covered with photo-voltaics and you would still face a ruinous shortfall. You are in a political party, be more realistic and pragmatic or risk being a laughing stock.

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  • PeterL  |  February 20 2013, 11:57AM

    People campaigning against a wind turbine in South Somerset complain about subsidies for renewables. This should really make their eyes water! Nuclear is not safe. Nuclear is Very expensive. Nuclear has a little waste problem that we should not forget. And finally Hinkley Point is on the Coast and will one day be inundated as sea levels rise. Sensible? I think not. Peter Lansdown Secretary South Somerset Green Party

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