A contract to build Britain's first new nuclear power station in almost 20 years will be announced by ministers "within the next two weeks", according to UK newspaper The Independent, quoting 'senior government sources'. The department of Energy and Climate Change is expected to reveal details of an agreement with EDF Energy to build a reactor at Hinkley Point in Somerset.
Negotiations between EDF and the government stalled earlier this year when they reached deadlock over the so-called strike price - the guaranteed price at which EDF will be able to sell the electricity it generates at the new plant. Talks have also been complicated by the need for EDF to get agreement from the French government to go ahead with the deal. EDF, which is owned 84% by the French state, is giving cause for concern over its indebtedness and could be placed in serious difficulty if this £14bn investment were to be jeopardized by cost overruns.
The two reactors EDF is planning for Hinkley are key to the coalition government's plans to shift the UK away from fossil fuels towards low-carbon power, particularly nuclear and offshore wind, a transition seen as crucial if Britain is to meet its binding targets for cutting carbon emissions while at the same time maintaining a sufficient capacity margin.
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