Hinkley to cost UK consumers as much as £21bn

Hinkley to cost UK consumers as much as £21bn

by Big Mac

Cooling towers emit vapor into the night sky at a nuclear power plant operated by EON SE in Grohnde, Germany, on Wednesday, Aug. 07, 2013. Germany's air pollution is set to worsen for a second year, the first back-to-back increase since at least the 1980s, after Chancellor Angela Merkel's decision to shut nuclear plants led utilities to burn more coal. Photographer: Krisztian Bocsi/Bloomberg via Getty Images

The Hinkley Point C (HPC) nuclear power plant will cost UK consumers as much as £21 billion over the lifetime of the project.

EDF has negotiated a strike price of £92.50/MWh for the electricity it generates for 35 years with the UK Government under its Contracts for Difference (CfD) scheme.

The final agreement was signed by the French utility, the UK Government and China’s CGN.

Prime Minister Theresa May delayed approving the project in July while she reviewed it before giving the final go-ahead earlier this month following which EDF’s credit rating has been downgraded.

According to the government, the total cost over the whole CfD has been estimated at £11 billion to £21 billion. Its “most realistic projections” mean around £12 from energy bills will go towards supporting the plant in 2030.

There have however been concerns about the strike price being too high.

The government states: “It is not just HPC which will receive support from consumer bills; other clean technologies such as offshore wind receive the same kind of support. These payments are only one part of a consumer’s electricity bill and only partially reflective of the costs of decarbonisation.

“For example, if HPC is delayed by three years and offshore wind and carbon capture and storage (CCS) are needed to fill the gap, it would lead to a £24 annual increase on household electricity bills on average from 2026 to 2030 (2012 prices). Similarly, if onshore wind and large-scale solar PV were to fill the gap, consumer bills would increase annually by £21. Gas plant coming on to fill the gap would see bills £6 cheaper per year but this would undermine the UK’s ability to meet legally binding decarbonisation targets.”

HPC is expected to provide 7% of the nation’s power needs and create 26,000 jobs and apprenticeships.