The UK government has confirmed that it is considering putting taxpayers' money into a project to build a new nuclear power station at Wylfa in North Wales.
This is 180 degree shift from its position in 2010 when it said it was adamant that the UK public should never have to run the risk of the lengthy and costly overruns that have become a hallmark of nuclear plant construction.
That risk is eliminated from the Hinckley Point C NPP deal, but at the cost of higher electricity tariffs. The National Audit Office and the Public Accounts Committee were critical of that deal and there was considerable pressure to significantly reduce the cost of power from the Wylfa plant. It is expected to come in at around £77 per megawatt hour, compared to £92.50/MWh for Hinkley.
Energy Secretary Greg Clark told the BBC: "We listened to the NAO and PAC and thought it appropriate to explore a different way to deliver a project of this size."
Environmental groups condemned the deal. The Green Party’s Caroline Lucas said: "Taking a stake in this nuclear monstrosity would see taxpayers locked into the project and paying out for a form of electricity generation that's not fit for the future."
However, Dieter Helm, professor of Energy Policy at the University of Oxford, told the BBC that the government shift made sense.
"The sheer cost of building new nuclear power stations means it makes sense for the government to help finance projects like this," he said. "Governments can borrow much more cheaply that private companies and that lower cost of borrowing can drastically reduce the ultimate cost. Hinkley Point C would have been roughly half the cost if the government had been borrowing the money to build it at 2%, rather than EDF's cost of capital, which was 9%."
Linkedin
