Fresh criticism has be brought to the table by MPs regarding the Hinkley Point nuclear power plant and the projected subsidy costs based on the promised price for the energy it will eventually generate.
The station is predicted to cost bill payers somewhere in the region of £30bn over the course of the 35-year contract, and to increase the size of the average household’s annual energy bill by around £10-15.
Further concerns have been raised by the Public Accounts Committee, who have said they were disappointed by the government’s lack of planning to make use of the wider benefits of the project beyond the actual power provided. “The department does not know to what extent UK workers and companies will benefit from Hinkley Point C and the wider follow-on new nuclear programme, and has no plan in place to show how it will maximise the wider benefits of the project,” the report said
EDF, the French company who are funding two thirds of the costs have said that they expect it to bring “huge benefits” to Britain.
EDF were given the go ahead for Hinkley point by the Government in 2016 which is located near Bridgewater. The deal will assure that the French firm will receive a fixed price of £92.50 per megawatt hour for the electricity produced during the 35 year arrangement. The power station is the first of its kind to be constructed in Britain since the mid-90s and is predicted to supply around 7% of the countries electrical requirements from the mid-2020s
“The committee is concerned consumers are locked into an expensive deal lasting 35 years and that the government did not revisit the terms between the original decision to go ahead and now, despite estimated costs to the consumer having risen five-fold during that time. Over the life of the contract, consumers are left footing the bill and the poorest consumers will be hit hardest. Yet in all the negotiations no part of Government was really championing the consumer interest,” the report says.
The eventual cost for consumers is thought to have been inflated due to the government disinclination to renegotiate the price of power for fear that EDF and its Chinese partner CGN would walk away from the deal. Many MPs have questioned the merit of this decision.
Meg Hillier, chair of the group of MPs, said: “Billpayers have been dealt a bad hand by the government in its approach to this project.”
“Its blinkered determination to agree the Hinkley deal, regardless of changing circumstances, means that for years to come energy consumers will face costs running to many times the original estimate.
“It doesn’t know what UK workers and business will gain from this project, and appears to have no coherent idea of what to do about it.”
Much of the criticism has stemmed from a report from the UK’s spending watchdog, the NAO. The findings were that the ill-advised contract for Hinkley had trapped energy consumers into a “risky and expensive project”. Further judgement was levied by the NAO at the government for the lack of alternative financing models explored such as taking stake in Hinkley.
The Government has defended, the move, with a spokesperson for the Department for Business Energy and Industrial strategy (BEIS) saying “The government negotiated a competitive deal for the construction of the first new nuclear power station in a generation as part of our energy mix, which ensures consumers won’t pay a penny for any construction overruns and until the station generates electricity in 2025.”
The Public Account Committee made 6 recommendations to the BEIS regarding the project.
- That they should implement a plan to create wider economic benefits from Hinkley point
- An independent commission should be undertaken to asses what affect it will have on consumers
- Make a case for nuclear power prior to any more power stations being agreed
- Draw up a cost/risk analysis of funding for any future large infrastructure projects
- Make sure that there is a plan B if the Hinkley point power station should have any issuers
- Ensure consistent and thorough monitoring of the project throughout the entirety of construction
EDF commented on the project, saying “The cost of Hinkley Point C for customers has not changed and they will pay nothing for its reliable, low carbon electricity until the station is completed.
“The agreed price is lower than 80% of other low carbon capacity contracted so far and the project has restarted UK nuclear construction after a quarter century. Construction is fully underway and is already delivering a huge benefit to British jobs, skills and industrial strategy.”
