According to a UK government advisory ‘DECC government major project portfolio data, September 2015’, published on 7 July this year, the total lifetime cost of Hinkley C nuclear power station is now estimated at £36.96 billion, rather than the 14.4 billion it estimated a year ago. This does not imply a rise in the building cost, which is unchanged, but reflects the estimated subsidy for the plant, arising from the ‘contract for difference’ guaranteed wholesale price of £93/MWh, has more than doubled. The CfD is based on the difference between the cost of power from the new plant and the projected wholesale cost of electricity at the time.
The change appears to arise from a revision downwards of DECC’s estimates for the wholesale cost of electricity, owing mainly to a fall in gas and other fossil fuel prices, meaning the UK bill-payer is, in practice, paying a larger subsidy for the project.
Daisy Sands, Greenpeace head of Energy, commented: “The government once promised that new nuclear power would not receive a public subsidy. The fact that the subsidy to Hinkley has doubled in a year is doubly shocking given the government’s hostility and slash and burn approach towards help for homegrown renewable energy companies. EDF and the Chinese nuclear state owned companies will reap the rewards of the UK government’s generosity while renewables companies are going bust due to lack of government investment and political support. It is no wonder that the French government and EDF are piling on pressure to the French unions to capitulate and cease their calls for delay.
"In the UK, Brexit [Britain’s exit from the European Union] is throwing up endless questions that no one knows the answers to over the future of the European energy market. It would be idiocy of the highest magnitude for the UK government in its current incarnation to sign this disastrous deal."
The UK’s decision to vote to leave the EU has caused a fall in the value of the pound which is another factor likely to make Hinkley more expensive to build, because key components, such as the reactor vessel, must be imported.
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