British consumer subsidy quintuples on Hinkley Point

• 7 years ago (2016-07-14)

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The new figure represents the reduction in long-term forecasts for the wholesale cost of electricity, which has widened the gap between market prices and the amount promised by the UK government to EDF, the French company planning to build the plant.

In a report on nuclear power published on Wednesday, the UK public spending watchdog said the estimated value of the premium due to EDF over the 35-year duration of the contract had increased from £6.1 billion ($8.14 billion) to £29.7 billion ($39.7 billion).

The new projection of the consumer subsidy will add additional fuel to the debate over the heavy cost of Hinkley Point, which the government sees as crucial to the UK renewing its aging nuclear fleet, and to France’s efforts to maintain its industrial strength in nuclear power. The government wants Hinkley Point complete by 2025.

In addition, the NAO report has highlighted several “value-for-money risks” to consumers and taxpayers from the government’s plans for a new generation of nuclear power stations, which it said “relies more on strategic than financial grounds”.

Peter Atherton, a prominent independent energy analyst, said that the NAO forecast highlighted the high stakes for both sides of the Hinkley deal, with the UK gambling on electricity prices in return for EDF bearing the construction risks.