After lengthy negotiations, the UK government has finally reached an agreement with the French energy company EDF to build the Hinkley Point C power plant.
London’s engineering institutions have welcomed the announcement, hinting it was long overdue and said nuclear power is an important part of the UK’s energy mix securing sustainable, low-carbon electricity.
“There will be relatively high costs in developing this new nuclear facility but broadly comparable with other low carbon technologies such as offshore wind, and, potentially, carbon capture and storage applied to gas and coal fired power stations,” said Simon Harrison, Chair of the Institution of Engineering and Technology’s (IET) Energy Policy Panel.
Tim Fox, Head of Energy and Environment at the Institution of Mechanical Engineers, stressed that the UK’s nuclear infrastructure, having been built mostly in 1970s and 1980s, desperately needs an upgrade.
“Nuclear is a key electricity source for the future as it provides reliable, low-carbon electricity and new nuclear plants will be used as replacements for the country’s ageing nuclear fleet, the bulk of which are set to retire by the end of the decade,” he said.
“This announcement is a welcome step towards giving the UK nuclear engineering and research community confidence that the nation has a future in this sector and should act as a catalyst for encouraging the other consortia, Horizon Nuclear Power and NuGen, to continue with the plans for new plant at Wylfa, Oldbury and Moorside among others.”
Set to become the first new UK nuclear power plant in a generation, the Hinkley Point C is foreseen to be completed, tested and fully operational by 2023.
The deal signing has been delayed as negotiations got stuck regarding the so called strike price for the electricity produced at the site. The finally agreed £92.50 per megawatt hour is twice as high as the current market place and will most probably earn some criticism.
The options remain open for this strike price to fall by £3 in case another proposed development in Sizewell goes ahead, allowing for efficiencies in development and testing.
The contract is due to run for 35 years, with the electric price increasing annually in line with CPI inflation. At full capacity the two reactors could provide up to 7 per cent of the UK’s energy needs.
It is understood that China General Nuclear Power Group and China National Nuclear Corporation will be investing in the estimated £14bn scheme.
The project is believed to contribute to the reduction of the UK's carbon emissions by nine million tonnes a year, and create thousands of jobs.
"We think it would be good value if (the strike price) was a little higher," said the UK’s energy secretary Ed Davey.
"I was determined to get them below £90 so I could prove to everybody we had got a good deal,” explaining the project is crucial to help secure the future energy needs of the country.
Mr Davey stressed that the construction risks were being borne by the companies, and the Government would not be on the hook for any overspends. However, if costs fell, the taxpayer would share in the savings.
Hinkley Point C will be the first new nuclear power station to be built since Sizewell B, which started generating electricity in 1995.
The Government said building a new fleet of nuclear power stations could reduce bills by more than £75 a year in 2030.
Around 25,000 jobs are expected to be created during construction of the power plant as well as 900 permanent jobs during its 60-year operation.