THE COMPANY that wants to build a new nuclear power station in Britain will today meet with top government officials in an attempt to thrash out an agreement on the public subsidy for the project.
EDF Energy has been locked in talks for months as both sides debate where to set the “strike price” – the guaranteed minimum amount that the company will receive every time it generates a unit of electricity – for its proposed power plant at Hinkley Point in Somerset.
The power company claims the project cannot go ahead without the state guaranteeing returns over a 30-year period. However critics say the government will end up handing over billions of pounds in subsidies if the wholesale energy market crashes.
Yesterday Lord Hutton, the head of the Nuclear Industry Association, issued a stark warning that failure to agree a price soon would “impact on our future energy security” and damage Britain’s attempts to attract infrastructure investment for overseas investors.
“There is no Plan B for our energy security. Failure exposes Britain to many risks, while success will help settle our energy future and send a strong signal to potential investors that Britain means business,” the former Labour cabinet minister wrote in the Sunday Telegraph.
Construction of Britain’s most recent nuclear power station – Suffolk’s Sizewell B – began back in 1987 and work on the new wave of reactors only began in earnest six years ago.
Initially it was hoped that private companies would be able to fund new generating capacity on their own but rapidly rising costs and lengthy delays have caused many interested groups to abandon their plans and seek government subsidies.
At the end of last year E.ON and Npower sold their interest in their Horizon joint-venture to Hitachi, while EDF’s Hinkley Point project was itself hit in February after British Gas owner Centrica pulled out of the joint venture due to the projected timeframe.