New nuclear power has a role to play as part of our low carbon infrastructure. The planned Hinkley Point C (HPC) nuclear power plant could make a real contribution to meeting the UK’s energy needs, as well as providing many jobs in the construction and energy industries. However, I do not believe that this should come at any price and I appreciate the concerns you raise.
EDF Energy confirmed its decision to go ahead with building HPC in July. However, the government announced at a day’s notice that it was delaying signing the final agreement. It is now conducting a review into the project, to report in the early autumn.
The government has seriously mismanaged the public interest in HPC. The project is already eight years delayed and has serious technical problems. Furthermore, there is still no assurance that it will be operating by 2025, when coal is no longer supplying the base power we need. After two years of rejecting calls, including from the Opposition, for a plan B, the government should now set out a clear agenda for the future of nuclear power in the UK, including a root and branch review of the HPC project.
There are particular concerns about the cost to consumers of the government’s agreement with EDF. In 2013, the government agreed a ‘strike price’ of £92.50 for every megawatt-hour of electricity generated by HPC for 35 years. This is far too high, particularly when the cost of other low carbon energy sources, such as wind and solar, has been falling to record lows and when the government has been cutting support for more affordable clean energy technologies.
The National Audit Office estimates that the cost of the government subsidy for electricity provided by HPC has risen from £6.1 billion to £29.1 billion, while the government itself estimates the whole life cost of HPC at £37 billion, up from an estimate of only £14 billion last year. If HPC is further delayed, we would have to build other power plants to fill the supply gap, while still having to pay EDF for energy we no longer needed.
The government needs to renegotiate its contract with EDF, including by insisting on a price taper so that customers pay less for any further delay to HPC. The government should now act to ensure that it does not give EDF an open-ended commitment and that consumers are protected.