The cost to consumers of building the Hinkley Point nuclear power station could reach nearly £30 billion because of falling wholesale electricity prices, the spending watchdog has warned. Payments needed to guarantee the plant’s developer, EDF, a price for the electricity produced have more than quadrupled to £29.7 billion from £6.1 billion when the deal was agreed in 2013, the National Audit Office said. The “top-up” payments are met by consumers through a levy on bills. Theresa May has appointed a prominent critic of Hinkley, Nick Timothy, as a senior No 10 adviser. Mr Timothy has in the past stated that he was “baffled” by the project and criticised the role of Chinese investors, whom he has described as a potential security risk. A senior EDF manager told Le Parisien newspaper that EDF’s promise to set aside €24.7 billion to fund Hinkley Point was “vastly insufficient”, suggesting it could be twice that. Critics say that EDF, which has debts of €37 billion, cannot afford its part of the £18 billion that Hinkley Point was supposed to cost to build. That bill is being shared between EDF and CGN. They say that if the true price of construction was higher, the scheme would cripple the company.
Times 14th July 2016 read more »
Peter Atherton, a prominent independent energy analyst, said the NAO forecast highlighted the high stakes for both sides of the Hinkley deal, with the UK taking a gamble on electricity prices in return for EDF bearing the construction risks. “It started as a commercial project but it has become a political project,” he said.
FT 13th July 2016 read more »
The NAO also used its report to warn that the financial case for new nuclear was becoming less compelling as the costs of wind and solar power fell. “The cost competitiveness of nuclear power is weakening as wind and solar become more established,” it said. “The decision to proceed with support for nuclear power therefore relies more on strategic than financial grounds.” It said these strategic grounds included the need to “complement the intermittent nature of wind and solar” and the fact that generating an equivalent amount of power from wind and solar “would mean covering large areas of sea or land, which could cause public opposition and technical challenges”.
Telegraph 13th July 2016 read more »
A government spending watchdog has launched a devastating critique of Hinkley Point C, warning that the nuclear project could cost energy consumers £30bn in “top-up payments” due to falling wholesale power prices. The damaging review comes less than a week after an Infrastructure and Projects Authority (IPA) assessment published by the Department of Energy and Climate Change (Decc) put the potential cost of Hinkley at £37bn. John Sauven, director of Greenpeace UK, said Theresa May should kill off Hinkley as soon as possible. Meanwhile a French parliamentary report concluded that despite the risks of the project, Hinkley was a manageable risk and cost to EDF. The French company has promised to take a final investment decision in September.
Guardian 13th July 2016 read more »
The estimated bill for subsidies for Hinkley Point C under the contracts for difference scheme has soared to £29.7 billion, the National Audit Office (NAO) has said. The figure is nearly five times as much as the original estimate of £6 billion, which was calculated in October 2013 when the government agreed the contract. The value of the top-up payments increased “due to reductions in projected wholesale prices”, the NAO said in a report. The CfD scheme sees generators paid the difference between the wholesale price at which they sell their electricity and an agreed ‘strike price’.
Utility Week 13th July 2016 read more »
French state-controlled utility EDF can bear the financial risks linked its Hinkley Point nuclear project in Britain despite the various constraints it faces, a French parliamentary report said on Wednesday. EDF’s 18 billion pounds ($26.5 billion) project and its implications for the company has divided opinion in France at a time when its finances are severely stretched. The report by parliament’s finance committee said it was of the opinion that despite constraints EDF was facing, the risks linked to the project were reasonable, and plans including a 4 billion-euro share issue and sale of a stake in its grid operator unit, will enable it bear the risks. “Without minimising the importance of financial investment nor the industrial risks linked to the project…we noted that experience gained from ongoing projects will be beneficial in the realisation of the Hinkley Point project,” the report said.
Reuters 13th July 2016 read more »
Dame Vivienne Westwood DBE has announced that she will become a patron of the Stop Hinkley Campaign as a result of EDF Energy’s plans to build two large new nuclear reactors at Hinkley Point in Somerset.
Blue & Green Tomorrow 13th July 2016 read more »
THE potential lifetime cost of Hinkley C could be as high as £37 billion according to an assessment published by the UK government. The Department of Energy and Climate Change (DECC) said the figure was provisional and would not affect bill payers. French energy giant EDF said the £37bn figure should be disregarded. “Hinkley Point C will generate reliable low-carbon electricity in the future, so a cost estimate based on last year’s depressed wholesale price is not relevant,” an EDF spokesman said.
This is the West Country 12th July 2016 read more »