deal to build Hinkley Point C 'will be finalised in weeks'
£25bn contract to build Hinkley Point C is expected to be
signed within weeks, according to national press reports this
in the Department of Energy and Climate Change have reached an
agreement with the French energy company EDF to develop Hinkley
Point C, near Burnham-On-Sea, and are ready to approve the project
after parliaments summer recess.
Guardian newspaper reports that David Cameron and Chinas
president, Xi Jinping, are expected to sign the deal at a meeting
than two thirds of the upfront investment costs for the controversial
project will be provided by two Chinese companies, with Beijing
keen to secure a greater stake in further nuclear power plants.
has faced growing criticism from energy experts, who have questioned
the rising costs of the electricity it would generate and whether
it is right to subsidise nuclear while cutting money to renewables.
at HSBC said in a report published last week that Hinkley was
"becoming harder to justify."
part of the contract, EDF and China General Nuclear will be responsible
for any cost overruns in the construction of the plant, which
is supposed to meet 7% of Britains electricity needs.
once it is in operation the government has agreed to pay £92.50
per megawatt hour (MWh) of electricity generated for the 35 years
of the contract. This is well above the current wholesale price
of electricity, which is about £50 per MWh.
HSBC report said that European wholesale electricity prices are
expected to fall from this level over the contract period, resulting
in a "huge difference between UK forward prices and the Hinkley
price." This cost will ultimately be paid for in consumer
say the subsidy represents value for money as it is the only realistic
way of reducing UK carbon emissions while ensuring a consistency
sources told the newspaper that it expects to see contracts signed
in the early autumn. Last week the company announced selected
preferred bidders for £1.3bn worth of contracts relating
to the project, as we reported
month, the Austrian government mounted a legal challenge at the
European court of justice against EU-granted subsidies for Hinkley,
arguing that it is in breach of EU law and risks distorting the
market. Ministers have dismissed the challenge as "weak".
groups claim that Britains future electricity needs could
be met by renewables alone.