Nuclear plant to cost consumers 'billions more'

2017-06-24 08:40
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London - A highly-controversial UK government deal for the new Hinkley Point nuclear power plant will cost British energy consumers billions more pounds than forecast, the country's National Audit Office said on Friday.

"The Department for Business, Energy and Industrial Strategy's deal for Hinkley Point C has locked consumers into a risky and expensive project with uncertain strategic and economic benefits," the NAO said in a report.

Under the project, UK energy users will have sums added to their bills for a period of 35 years.

The NAO said the combined cost of such payments is set to surge to $38bn.

"Delays have pushed back the nuclear power plant's construction, and the expected cost of top-up payments under the Hinkley Point C's contract... has increased $38bn," the report said.

"It will not be known for decades whether Hinkley Point C will be value for money. This will depend on whether the current contractual arrangements endure, along with external factors, in particular, future fossil fuel prices, the costs of alternative low-carbon generation, and developments in energy technology and the wider electricity system," it added.

Amyas Morse, head of the National Audit Office, said "time will tell whether the deal represents value for money, but we cannot say the Department has maximised the chances that it will be".

The contract for a French-Chinese consortium to build Britain's first nuclear plant in a generation was signed in September after a string of controversies threatened to scupper the huge deal.

China's involvement

The British government had delayed agreement over concerns about China's involvement, while there were also questions about how the French state-owned power giant EDF would fund the construction of Hinkley Point.

But Britain finally gave the go-ahead last September for the complex, which is expected to provide seven percent of the country's power needs.

Beijing's state-run China General Nuclear Corporation is set to finance £6bn of the cost of the Hinkley Point plant, with French state-owned power giant EDF providing the remaining £12bn.

Critics have focused on an electricity price guarantee to be paid to EDF of £92.5 for every megawatt hour of power produced by Hinkley for the next 35 years, rising with inflation, despite falling energy prices.

The project is meanwhile strongly opposed by environmentalists, who urged the government to focus on renewable sources like wind and solar power to meet Britain's future energy needs - especially since a massive earthquake and tsunami ravaged Japan's northeast coast and triggered a meltdown at the Fukushima nuclear power plant in 2011.

Read more on:    uk  |  china  |  france  |  nuclear

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