Hinkley Point C deal struck
The agreement reached today between the Government and EDF Energy will guarantee the future of nuclear in the UK and its competitiveness as a low carbon source of generation.
The proposed Olympic-scale project will employ more than 5,000 people at the peak of construction, 900 people once operational, and create a lasting industrial legacy to enable the UK to compete in the global nuclear market, anticipated to be worth £1 trillion by 2030. If it goes ahead Hinkley Point C will provide clean, reliable and affordable electricity for five million homes for sixty years.
The Government and EDF Energy have agreed the Contract for Difference, which will determine the price consumers will pay for the electricity generated by Hinkley Point C.
The agreed strike price, which includes the wholesale cost of electricity as well as the costs associated with building and financing major new infrastructure, demonstrates that nuclear power is currently the lowest cost source of clean energy.
The strike price will be £89.50 per megawatt hour if a further project at Sizewell C goes ahead, or £92.50 without a second nuclear plant.
New infrastructure of this scale will generate huge socio-economic benefits, tens of thousands of new jobs, and boost the UK’s industrial capability. Hinkley Point C will also make a major contribution towards energy security in the UK as ageing plants are expected to come offline.
In addition, the operator will be required by law to fund the full cost of decommissioning and clean up at the end of the plant’s operational life.
Nuclear Industry Association Chairman, Lord Hutton said:
“Today’s very welcome agreement confirms to investors and the UK nuclear supply chain that new nuclear build is a reality. This major infrastructure project will give a vital boost to British industry, and create tens of thousands of new jobs and opportunities in construction, manufacturing and operations.
With strong cross-party and public support nuclear energy will make a significant contribution to a balanced energy mix, providing the clean, affordable and reliable electricity that is the bedrock of a successful economy.”
The agreement with the Government is subject to the EDF Board’s Final Investment Decision on the major infrastructure project.
Nuclear Industry Association Chief Executive, Keith Parker said:
“This is the first major test of electricity market reform. By incentivising investment in nuclear energy and other low carbon technologies, the UK is well on the road to ensuring secure domestic supplies of electricity for the long-term.
“Today’s agreement will help protect consumers from the uncertain and volatile costs of imported fossil fuels for decades to come.”
Key terms of the contracts for the four most important suppliers to the project have now been finalised subject to a final investment decision. These are with:
- Bouygues TP/Laing O’Rourke (civil work contract)
- Costain (marine work)
- Alstom (turbines)
- Areva (Instrumentation and Control, Nuclear Steam Supply System and Fuel)
Work with potential suppliers, as well as national and local supply chain events have promoted opportunities for UK and Somerset businesses to supply the project. This means that 57% of the project’s construction value could be spent in the UK, building skills and expertise which will help the country win a greater share of nuclear programmes nationally and globally.
Hinkley Point C will help combat air pollution, and save 10 million tons of carbon emissions each year.
Today’s announcement comes after planning permission was granted by the Secretary of State Edward Davey in March 2013, and after environmental consents were granted in December 2012. The project had earlier secured design approval through the Generic Design Assessment (GDA) process and its site licence from the Office for Nuclear regulation (ONR)
