Despite mounting concerns over the cost of the Hinkley Point C project, new Chancellor of the Exchequer says project must go ahead.
Hinkley Point C nuclear plant is “still worth the cost”, with the new Chancellor of the Exchequer, Philip Hammond confirming the government remains committed to building the nuclear power station.
According to the National Audit Office, Philip Hammond’s vow came despite the rising cost to the government of the electricity it will produce, saying that Hinkley was vital to a strong economy.
Previously, the power station was estimated to cost around £6Bn, however a more recent estimate sees the cost rise to £18Bn.
As part of the 35-year deal signed with France’s EDF in 2013 to build the plant in Somerset, the government agreed to pay £92.50 for each megawatt hour of electricity.
Wholesale energy prices have fallen since that price was agreed, which meant the government must now make up the difference. The NAO estimated that future top-up payments would rise from £6.1bn to £29.7bn over the length of the contract.
An Infrastructure and Projects Authority assessment was published by the Department of Energy and Climate Change, which put the potential cost of Hinkley at £37Bn, with a spokesman for the Department for Energy saying that the revised estimate would not mean higher bills for consumers and that “Hinkley will generate enough low carbon electricity to power six million homes and around £10 from consumer bills will pay for it once it is up and running.”
The future of the facility is in the hands of EDF and the French government. Both parties have repeatedly delayed taking a financial decision on the scheme amid mounting debt problems at the partly state-owned energy group. EDF and the Elysée have promised that a final investment decision will be taken in September.
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