QuickTake Q&A: Britain and France’s $24 Billion Nuclear Gamble

Just how big is the price tag on the U.K.’s first nuclear-power plant in 20 years, which finally got the green light on Thursday? Some wonder if it will be the most expensive object ever built. Hinkley Point C is planned for the county of Somerset in southwest England, near two existing plants, one of which has been decommissioned. The French energy company Electricite de France SA is to build the two new reactors along with China General Nuclear Power Corp. Expected price tag: 18 billion pounds ($23.6 billion).

The plant is huge -- with output equivalent to about three large coal-fired stations -- and nuclear reactors are among the most complex of all engineering projects. To make the project viable, the U.K. pledged to pay EDF 92.50 pounds for every megawatt-hour of electricity it produces for 35 years, more than twice the current market price. While that would give the French company an annual rate of return of 9 percent, British consumers could pay $48 billion above the market rate over the lifetime of the project, according to one forecast.