UK nuclear power plant gets go-ahead


Will the new nuclear plant mean cheaper bills? Energy Secretary Ed Davey is challenged at a news conference

The government has given the go-ahead for the UK's first new nuclear station in a generation.

France's EDF Energy will lead a consortium, which includes Chinese investors, to build the Hinkley Point C plant in Somerset.

Ministers say the deal will help take the UK towards low-carbon power and lower generating costs in future.

Critics warn guaranteeing the group a price for electricity at twice the current level will raise bills.

"For the first time, a nuclear station in this country will not have been built with money from the British taxpayer," said Secretary of State for Energy Edward Davey.

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If the electricity price is below the strike price, then bills will probably go up. If it is above the strike price, then bills could go down.”

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The two reactors planned for Hinkley, which will provide power for about 60 years, are a key part of the coalition's drive to shift the UK away from fossil fuels towards low-carbon power.

Ministers and EDF have been in talks for more than a year about the minimum price the company will be paid for electricity produced at the site, which the government estimates will cost £16bn to build.

The two sides have now agreed the "strike price" of £92.50 for every megawatt hour of energy Hinkley C generates. This is almost twice the current wholesale cost of electricity.

This will fall to £89.50 for every megawatt hour of energy if EDF Group goes ahead with plans to develop a new nuclear power station at Sizewell in Suffolk. Doing both would allow EDF to share costs across both projects.

The wholesale cost of generating electricity in £/MWh
Cost of generating electricity £/MWh, Nuclear £92.50, Onshore wind £100, Offshore wind £155, Tidal and Wave £305, Solar £125, Biomass £105, Electricity (coal and gas generated) £56.06:

Mr Davey said the deal was "competitive" with other large-scale clean energy and gas projects.

Ed Miliband: "The prime minister... can't freeze prices now for the consumer"

"While consumers won't pay anything up front, they'll share directly in any gains made from the project coming in under budget," he added.

John Cridland, director-general of business lobby group the CBI, welcomed what he said was a "landmark deal".

"It's important to remember this investment will help mitigate the impact of increasing costs. The fact is whatever we do, energy prices are going to have to go up to replace ageing infrastructure and meet climate change targets - unless we build new nuclear as part of a diverse energy mix."

However, Dr Paul Dorfman, from the Energy Institute at University College London, said "what it equates to actually is a subsidy and the coalition said they would never subsidise nuclear".

He added: "It is essentially a subsidy of between what we calculate to be £800m to £1bn a year that the UK taxpayer and energy consumer will be putting into the deep pockets of Chinese and French corporations, which are essentially their governments."

Hinkley Point C Hinkley Point C is set to take 10 years to become fully operational. It will be made up of two nuclear reactors and will be built next to Hinkley Point A and B.
Sea wall at Hinkley Point C The land will need to be flattened and then the sea wall will be built. After this, excavation work can start to lay the foundations of the nuclear plant including two underground two-mile (3km) tunnels for the cooling water.
Turbine hall The building of the two reactors will be staggered with the first reactor expected to be operational by 2023.
Turbine hall The other aspects of the build include the turbine halls, standby power generators and a pumping station for the cooling water, interim waste storage facilities as well as a visitors' centre.
Workers' campus (artist impression) Workers' accommodation will be built across three sites, with two in Bridgwater and a third on site. Other infrastructure includes building two park and ride sites and developing Combwich Wharf.
View of Hinkley Point C with Hinkley Point A and B in the background The power station is expected to provide up to 25,000 jobs during the lifetime of the project and once built will provide about 900 full-time jobs.
China invests

Chinese companies China National Nuclear Corporation and China General Nuclear Power Corporation will be minority shareholders in the project.

The move follows Chancellor George Osborne's announcement last week that Chinese firms would be allowed to invest in civil nuclear projects in the UK.

Prime Minister David Cameron said that the new Hinkley Point plant was "an excellent deal for Britain and British consumers".

"This underlines the confidence there is in Britain and makes clear that we are very much open for business," he added.

David Cameron:"It kick-starts again the British nuclear industry"

Labour leader Ed Miliband, who has pledged to freeze energy prices for 20 months if he wins the next election, said the party supported the development of new nuclear power stations, but would scrutinise the terms of the deal to ensure it delivered value for money for consumers.

"We've got the Prime Minister who says he can fix prices 35 years ahead for the energy companies but he can't freeze prices now for the consumer. No wonder we've got a cost of living crisis in this country," he added.

The existing plant at Hinkley currently produces about 1% of the UK's total energy, but this is expected to rise to 7% once the expansion is complete in 2023.

UK map of nuclear power sites

The announcement is not legally binding and it will be 2014 before EDF makes a final investment decision on the project. The plans will also require state aid clearance from the European Commission.

But it comes as concerns about domestic energy bills move up the agenda, with SSE, British Gas and Npower, three of the UK's "big six" gas and electricity suppliers, all having announced price increases.

The government estimates that with new nuclear power - including Hinkley - the average energy bill in 2030 will be £77 lower than it would have been without the new plants.

Energy UK, the trade body for the industry, said the agreement on Hinkley was "good news".

"Building new power stations is never quick or cheap, but in the case of Hinkley development, nothing goes on the bill until 2020," it said.

About 25,000 jobs are expected to be created during construction of the power plant, as well as 900 permanent jobs during its 60-year operation.


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  • rate this

    Comment number 670.

    Why aren't the dangers of Plutionium being spoken about? Please consider this part of the discussion because it seems to me we have all been duped into believing nuclear power is clean and it just isn't. Look at Fukushima. For goodness sake!

  • rate this

    Comment number 669.

    This folly will be a millstone round our children's necks for years to come. Ed Miliband needs to stop pussyfooting around with energy price freezes, disown the excesses of New Labour and get back to a Socialist agenda. A manifesto which included cancellation of HS2, nationalisation of water, electricity, gas and railways would go a long way to securing their re-election and a fairer future.

  • rate this

    Comment number 668.

    Oh dear - are we blind ? Rest in peace Masao Yoshida.

  • rate this

    Comment number 667.

    The French have got the expertise and the Chinese have got the money. Where do people think British companies are going find £16bn from? They can't borrow it from the banks or the government as they don't have any money either. HS2 might not be the best use of money but we are going to have to invest in rail with or without HS2. This is probably the best we can do in the circumstances.

  • rate this

    Comment number 666.

    @635. Welsh45

    I wouldn't worry too much, We're in a geologically stable zone, and the fukushima disaster wasn't caused by the earthquake itself but bad design when the Tsunami destroyed the generators for the cooling system. (They were below sea level). We don't have that to worry about in the UK, there's no subduction zone in the Atlantic.

  • rate this

    Comment number 665.

    Well for years now we have allowed the Greens and The Guardian to have their way and paid through the nose for the wholesale destruction of the UK landscape with an ocean of inefficient and massively subsidised wind farms.

    Nuclear energy has a lower carbon footprint, is economical despite the large investment needed, and YES, we can safely dispose or hold nuclear waste.

  • rate this

    Comment number 664.

    Once the plant is built and producing the owners will tell the consumers the price is going up. And why shouldn't they? It is what the other producers are doing to us.

    And we are being told this is good for us?

    Who exactly is "us"?

  • rate this

    Comment number 663.

    Its not about nationalisation, its about the stupidity of not learning lessons. PFI was a massive mistake, costing more than if the government had built the projects themselves. This is PFI in all but name. We could and should build nuclear/severn barrage ourselves and run as a hands off government owned energy business providing REAL competition to the Big 6. This is economic folly

  • rate this

    Comment number 662.

    Perhaps people would be less concerned about foreign investment in this country if they heard more about our investments abroad - surely there must be some?

  • rate this

    Comment number 661.

    Can someone explain to me why the Finnish EPR nuclear power plant had an initial cost of €3.2, the French one had a cost of €3.3bn but this one in the UK has an initial cost of £16bn?
    Ok, we're getting 2 reactors instead of one, and the other plants went significantly over budget, but the figures still don't add up, even if this one miraculously stays in budget.

  • rate this

    Comment number 660.

    If companies had to bear the cost of nuclear waste disposal, then nuclear power would not be financially viable!

  • rate this

    Comment number 659.

    Please consider;
    The cost of decommissioning nuclear plants; the problems of safe long term disposal of hazardous waste from the nuclear industry; the horrendous wide spread problems following an unlikely but possible nuclear disaster (earthquake, terrorist, wartime devastation).
    Please factor these into the economic and safety before celebrating nuclear power. equations

  • rate this

    Comment number 658.

    Get UKIP and Farage in to protect our interests.

  • rate this

    Comment number 657.

    " And now you think they {terrorists} understand nuclear physics?"
    You don't need to understand nuclear physics to make a dirty bomb. All you need is radioactive waste and enough explosives to disperse it.

    "Chernobyl killed less than 7/7 anyway BTW"
    7/7 didn't leave large parts of London uninhabitable for centuries.

  • rate this

    Comment number 656.

    Was having a look inside a Concorde on Saturday (G-BOAA). It's hard to believe Britain (and France) built Concorde and look at what Britain has become, just a glorified offshore bank for bigger countries. Really sad.

    And putting our future energy needs in the hands of others countries is just madness, it's all about profit. A few in the UK will profit and most will suffer through higher bills.

  • rate this

    Comment number 655.

    Germany has a much more progressive government than ours. Science and engineering is at the core of the German economy with important decisions made by scientists and engineers. Phasing out nuclear fission in Germany is quite sensible. Unfortunately we are stuck with politics, history and economics graduates making decisions in the UK. No surprise the UK is going backwards.

  • rate this

    Comment number 654.

    Please, please can the BBC educate us? I don't know enough to know whether this is a good or bad deal, but my gut tells me this is like handing the other end of the noose around my neck to a bunch of strangers. How much will it cost? What is the design? What is the safety record of the design? How does our current energy infrastructure work? How is that likely to change?

  • rate this

    Comment number 653.

    Rest Assured folks I see the calvary on the horizon. An army of media studies, social science & psychology graduates, allied with never worked in the real world professional politicos with degrees in politics & economics all backed up by several divisions of spiv lawyers (incase anyone has been injured through no fault of their own) and in reserve a division even more spiv like bankers.

  • rate this

    Comment number 652.

    I'm currently suffering from bouts of insomnia. If Cameron could tell me how the heck he sleeps at night, I'd be most grateful.

  • rate this

    Comment number 651.

    Any industry that finds it necessary to employ Angela Knight as its spokesperson obviously has something outrageous to hide.

    What the hell is OFGEM doing ?
    Aren't they supposed to protect the consumer from the corporate greed of the big 6?


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