Hinkley to Cost Consumers as Much as $27 Billion, U.K. Saysby
U.K. signs 35-year contract with Electricite de France
Government concludes Hinkley is cheaper than offshore wind
Electricite de France SA’s planned Hinkley Point C nuclear plant will cost British consumers as much as 21 billion pounds ($27 billion) in subsidies over the lifetime of the French utility’s contract with the U.K., according to an estimate from the government.
The plant will receive 92.50 pounds a megawatt-hour of power it produces for 35 years under a contract signed on Thursday by the French and U.K. governments. The cost of subsidies levied on consumer bills will probably range from 12 billion pounds to 21 billion pounds, according to a document posted Thursday the U.K. government website.
The long-delayed project has sparked controversy because the contracted price is more than double prevailing wholesale rates, and because of Chinese involvement that may lead in later projects to the use of Chinese technology. Prime Minister Theresa May in July delayed approving the project while she reviewed its provisions, before finally giving it the go-ahead earlier this month.
The U.K. “needs to upgrade its supplies of energy, and we have always been clear that nuclear power stations like Hinkley play an important part in ensuring our future low-carbon energy security,” Greg Clark, the Cabinet minister in charge of business, energy and industrial strategy, said Thursday in a statement.
Hinkley support payments will add an average of 12 pounds to each annual household bill in 2030, according to the document. The government concluded that the nuclear plant will cost toward the bottom of the range of estimates for offshore wind power and fossil fuels plants hooked up to carbon-capture-and-storage equipment. It’s likely to be toward the top of the range of estimates for gas plants, and above the cost of solar and onshore wind plants.
“In order for large-scale solar and onshore wind to produce the same amount of electricity provided by Hinkley Point C, there would be significant upgrades to the grid required (such as connection and planning costs) as well as increased costs to keep the system in balance,” the government said in the document. “Relying on gas alone would increase the risk of missing 2050 carbon targets.”
EDF’s 18 billion-pound plan is to build two nuclear reactors at Hinkley Point in southwest England, to generate about 7 percent of the U.K.’s electricity. The project is due for completion in 2025, and State-owned China General Nuclear Power Corp. is due to provide a third of the finance.