March 18 (Bloomberg) -- The U.K. will announce its decision tomorrow on whether to approve Electricite de France SA’s plan to build the nation’s first nuclear power station in 20 years.
The U.K. is ruling on whether construction at the Hinkley Point C plant in Somerset can proceed, three months after the country’s planning inspectorate handed its recommendation on the project to Energy Secretary Ed Davey on Dec. 19. The schedule is set out under the U.K. planning system for infrastructure. A ministry spokesman reaffirmed tomorrow is the deadline.
The power station would generate 7 percent of the U.K.’s power, enough for 5 million homes, for at least 60 years, EDF says. Revamping the nuclear industry is central to U.K. plans for 110 billion pounds ($166 billion) of investment in low-carbon electricity. Energy regulator Ofgem has warned of higher consumer bills as aging oil and coal-fired plants close.
EDF, the biggest nuclear operator, and the U.K. are trying to agree on a so-called contract for difference and strike price per megawatt-hour of power produced. The government has sought to introduce changes to the power market that ensure investors get a stable return regardless of prevailing prices.
No commitment has been made on the strike price, while talks to find a fair and affordable deal for power at the 3.2 gigawatt plant continue, the ministry spokesman said by e-mail.
“Planning approval will be a great step forward for EDF but the key issue for the project moving forward is agreement on a contract for differences and the strike price,” said Fiona Reilly, Norton Rose LLP nuclear services chief. “That would be a truly positive step and a signal to other developers and the market that nuclear new build in the U.K. is going to happen.”
Environmental groups such as Greenpeace say an agreement between EDF and the U.K. may lock consumers into higher bills.
Construction at the last new nuclear station, Sizewell B in Suffolk, started in 1988 and generation began in 1995. While Britain has no specific target for new nuclear, industry has set out plans to build 16 gigawatts of new reactors by 2025.
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