After weeks of discussions over the risks of investing in large-scale energy projects, the British government proposed to become an equal investment partner in the new Wylfa Newydd nuclear plant. Under a tripartite financing structure, London is going to take a £16 billion stake in the plant, signalling that it has learned its lessons from past failures. Both in Wales and further east in Europe, a public stake plays a critical role in facilitating large-scale, low carbon energy projects. Any discussion of the planned Wylfa Newydd project is obliged to give a cursory nod to Hinkley Point C, the first and only nuclear power station to be built in the UK since 1995. When complete, Hinkley Point will produce the most expensive electricity compared to all power stations bar none. Globally. The irony is that this is largely due not to the installation costs (admittedly somewhat higher than competition) but to its financing model. The House of Commons Committee of Public Accounts frets that with “estimated costs to the consumer having risen five-fold” since the project’s go-ahead, the deal struck on Hinkley Point locks Brits into footing the bill for the government’s lack of nous when negotiating the ‘strike price’ for electricity produced at the facility.
London Economic 4th July 2018 read more »