nuclear-news

Guaranteed money from UK for new nuclear – not a subsidy, REALLY?

Ed Davey ‘will not give an inch’ on nuclear power price   As a former nuclear sceptic, energy secretary says he regards the negotiations over Hinkley Point as a personal test The Guardian, Patrick Wintour 6 July 2013 The energy secretary on Saturday intervenes in the debate over nuclear power by insisting he will not budge a further inch in his offer of long-term guaranteed fixed prices for nuclear electricity. Ed Davey [Liberal Democrats] says he regards the negotiations as a test for his commitment to produce nuclear energy at an affordable price and without subsidy by the taxpayer.

The government is locked in lengthy talks with its preferred supplier, the French energy firm EDF, over a planned nuclear plant at Hinkley Point in Somerset, which would be the first in almost two decades. But Davey says EDF’s chief rival, Hitachi, looks willing to make an acceptable offer on price.

In a Guardian interview, he described the negotiations as a personal test ……..

He added: “I am determined that the consumer or the taxpayer will not bear the risk of construction over-runs. Nuclear will get no preference in comparison with other low-carbon technologies.”…..

His party opposed a new generation of nuclear reactors in its election manifesto but in 2010, in concert with its coalition partners, agreed it would let nuclear stations be built so long as the energy was not subsidised…….

Davey last week announced that EDF Electricité de France SA (EDF.FR) would be given guarantees of up to £10bn to underwrite the loans to build the proposed plant at Hinkley Point C, so making the project more attractive to third-party investors and reducing the impact on EDF’s balance sheet. He insisted that this did not represent a subsidy since the loan would be at a commercial rate……

The guarantee had been seen as vital to unlocking a deal but Davey said he was waiting for EDF to reflect on his offer on the strike price, adding there was a lull in the talks. It is expected that the guaranteed fixed price for nuclear electricity will be fully linked to inflation, and last 35 years.

Each power station would cost about £14bn to build. They would come onstream in 2020 and 2021, so a deal would not plug the apparent short-term gaps in the UK energy supply highlighted in recent weeks, Davey argued. “Nuclear is not part of the short-term or medium-term security issue, so EDF does not have us over a barrel on this…….

It has been reported that EDF, the world’s largest nuclear operator, seeks a strike price of £95-£100 per megawatt hour of electricity, while the government would rather settle around £80-£85. The current wholesale price is about £48/MWh.

Davey simply said the figures that have appeared in the media so far are not ones he recognises………

The importance of the negotiations to the UK taxpayer can hardly be underestimated. It has been suggested a strike price of around£95 per megawatt hour that was linked to inflation would yield accumulated revenues to EDF of £143.5bn over the 35 years of the contract, compared with £85.75bn if the contract were not linked to inflation…….

Davey is confident that a site for the waste can be located democratically. He said: “In terms of the location of the decommissioning, we need to be clear we already have huge amounts of waste left over now from the first two generations of nuclear reactors and from the military programme. We have to deal with that whether we build one single new nuclear reactor or not. It has to be dealt with. ……http://www.guardian.co.uk/politics/2013/jul/05/davey-minister-nuclear-power-hinkley-point

July 6, 2013 - Posted by Christina Macpherson | politics, UK