French energy firm EDF and the Department for Energy and Climate Change (DECC) will host the unveiling of Hinkley Point C today.
EDF’s long-time partner China General Nuclear Power Group is likely to be among the Chinese backers of the project, who are together expected to take a stake of up to 40 per cent. Areva, the French nuclear engineering firm, is also reportedly taking a small stake.
Chancellor George Osborne paved the way for the tie-up last week by announcing during a trip to China that the country will now be able to invest in the UK’s nuclear projects.
Hinkley Point C in Somerset will be the first nuclear power station to be built in Britain since Sizewell B in the 1990s, and the first in Europe since Japan’s Fukushima plant was damaged in a tsunami in 2011. Building the new reactors is expected to cost £14bn.
Under the deal, the EDF-led joint venture will build two reactors under its own steam. However, once the plants start contributing to the energy supply, the government will pay a guaranteed minimum for the power generated.
The firm has been locked in months of talks with DECC about the so-called strike price, which could see huge sums paid by the state to EDF if the market value of electricity falls below the guaranteed floor price. Reports at the weekend put the agreed price at around £92 per megawatt hour as part of an inflation-linked guarantee over the next 35 years, roughly twice the current wholesale market price but below the strike prices offered for renewable sources.
Neither DECC nor EDF would comment on the negotiations yesterday. In July, DECC estimated the average lifetime cost of a new nuclear plant was around £90 per megawatt hour.
EDF was left looking for a new partner in the long-delayed power plant in February when Centrica pulled out, saying its 20 per cent stake was no longer financially viable as the cost of the project spiralled.