Spending watchdog condemns ‘risky and expensive’ Hinkley Point Damning report says nuclear project is bad for UK consumers and governments failed to assess alternative finance models. Generations of British consumers have been locked into a “risky and expensive” project by the UK’s subsidy deal for a new nuclear power station at Hinkley Point in Somerset, according to a damning report by the spending watchdog. The National Audit Office said the contract sealed by ministers last September with EDF to construct the country’s first new atomic reactors in two decades would provide “uncertain strategic and economic benefits”. Further, Brexit and Theresa May’s decision to quit an EU nuclear treaty could make the situation even worse, by triggering taxpayer compensation for EDF or a more generous deal for the French state-controlled company. The watchdog condemned the past two governments for failing to look at alternative ways of financing the power station, such as taking a stake in the construction. Observers labelled the report “deeply worrying”, a “strong reprimand” and a vindication of Hinkley Point C’s critics, who had argued it was too costly and advocated alternatives such as wind and solar power.
Guardian 23rd June 2017 read more »
The National Audit Office does not use excitable phrases like “utter shambles.” But the spending watchdog’s verdict on Hinkley Point C, the nuclear power plant in Somerset that is supposedly inevitable, amounts to the same thing. The government “has locked consumers into a risky and expensive project with uncertain strategic and economic benefits”. The 80-page report confirms one’s worst fears about how ministers fell in love with Hinkley. First, they wedded themselves to an inflexible financial model. Then they agreed commercial terms with developer EDF in 2013, when energy prices were sky-high, and ploughed on regardless when the economic case for Hinkley started to crumble. When the deal was finally signed by Theresa May’s administration last September, the energy landscape had been transformed. The economic case for Hinkley was “marginal”, says the NAO, and “less favourable, but reasonable, assumptions” about energy prices and renewables would have meant the deal was not value for money even on the business department’s own model. The document tells a depressing tale of inadequate scrutiny and successive governments ignoring the energy revolution taking place beyond their spreadsheets. “Time will tell whether the deal represents value for money,” says the NAO generously, before adding the killer clause: “But we cannot say the department has maximised the chances that it will be.” The rest of us call that a politician’s vanity project.
Guardian 23rd June 2017 read more »
The government finalised the deal for the Hinkley Point C nuclear power station last year even though its own value for money tests showed the economic case for the new nulcear plant was ‘marginal and subject to significant uncertainty’, parliament’s spending watchdog has concluded. The National Audit Office’s (NAO’s) critical new report on the project, the second it has produced, accuses the department for business, energy and industrial strategy (BEIS) of concluding a deal that has “locked consumers into a risky and expensive project with uncertain strategic and economic benefits.” It says that “less favourable, but reasonable, assumptions” about future fossil fuel prices, renewables costs and follow on nuclear projects would have meant the deal would not have met the department’s value for money tests.
Utility Week 22nd June 2017 read more »
The UK’s public spending watchdog has reignited concerns that EDF Energy’s Hinkley Point C new nuclear project is a high stakes political gamble which may not pay off. A fresh report from the National Audit Office has found that energy bill payers could be locked into paying a higher than expected price for the uncertain promise of economic benefits. James Court, head of policy at the Renewable Energy Association, said the Government has been “ignoring the most cost-effective of all forms of electricity generation available right now – renewables”. “Solar and onshore wind are now cheaper than new gas and can be built quickly. New energy storage and flexibility technologies are rapidly developing and can be relied on to manage variability,” Mr Court added.
Telegraph 23rd June 2017 read more »
Hinkley deal ‘expensive and risky’. NIA chief executive Tom Greatrex added: “The NAO analysis of the strike price also highlights that using a different financing structure could have resulted in a lower strike price. “That is something government should reflect on as other new nuclear projects advance.”
BBC 23rd June 2017 read more »
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ITV 23rd June 2017 read more »
Britain’s deal with EDF to build the Hinkley Point C nuclear plant is risky and could lead to requests for more cash and electricity payment top-ups worth 30 billion pounds, a parliamentary watchdog said on Friday.
Reuters 23rd June 2017 read more »
City AM 23rd June 2017 read more »
Times 23rd June 2017 read more »
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Independent 23rd June 2017 read more »
Express 23rd June 2017 read more »
Roy Pumfrey, a spokesman for the Stop Hinkley campaign group, said: “This is a pretty devastating critique of the deal struck between the Government and EDF Energy on Hinkley Point C.”
Dundee Courier 23rd June 2017 read more »
Politics Home 23rd June 2017 read more »
NAO said the government should have at least considered sharing the construction risk at Hinkley to lower the cost for consumers. This conclusion will add to debate in Whitehall over whether the government should contribute to financing other planned nuclear plants, including one planned by Hitachi of Japan at Wylfa in Anglesey. Talks have been held between the UK and Japanese governments about making Wylfa a public-private partnership, according to people briefed on the matter. This would reduce costs for consumers compared with Hinkley but expose taxpayers to more risk.
FT 23rd June 2017 read more »
National Audit Office Report.
NAO 23rd June 2017 read more »