Family members could end up paying £50bn to help the new Hinkley Point C nuclear venture in Somerset, as indicated by government figures, more than eight times the 2013 assessment.
The most recent figures have uncovered that EDF’s offer to make the first new nuclear plant in a generation could cost energy consumers £50bn over the life of the venture, well over the £6bn cost assessed in 2013.
Consumers are on the hook for a far more noteworthy share of the venture costs because the wholesale market price for power is falling consistently while nuclear power development stays costly and high risk.
Under an arrangement between the Government and EDF Energy, resolved in 2013, Hinkley is assured to get £92.50 for each megawatt-hour (MWh) of energy delivered through a mix of wholesale market price and a demand on consumer energy bills.
At the time Government said this would require top-up instalments totalling £6bn through energy bills to meet the “strike price”, yet falling market prices have increased the estimate each year from that point forward.
Two years ago, the cost was evaluated at £13bn before it surged to over £30bn under new study from the general population spending watchdog a year ago.
The most recent report said the cost of supporting Hinkley would keep on varying as the standpoint at wholesale market prices changes. In principle, the arrangement secures consumer bills if market costs surge over the £93/MWh point however it likewise eradicates the advantage of less expensive market costs which many accept are more likely later on.
“Wholesale prices are volatile and sensitive to some uncertain factors including, for example, future global gas price trends, carbon prices, coal prices, the level of intermittent generators in the system and demand trends.
“Whereas the strike price agreed for Hinkley Point C is fixed and has been set following extensive negotiations with EDF and with advice from independent expert advisors,” the report said.
The reason for the market fall is the boom in the renewable power source, which is falling cost, and additionally the crash in worldwide oil and gas prices. As renewable costs keep on falling – and the energy system’s exposure to petroleum product markets winds down – specialists accept further market declines are likely.
The National Audit Office blamed the Government of engaging bill payers to “a high cost and risky deal in a changing energy marketplace.” It said that pouring financial support into renewable energy would prove to be a lower cost option.
A Government spokesperson continued that the Hinkley agreement is “an important strategic decision to ensure that nuclear is part of a diverse energy mix”.
The nuclear plant is presumed to create 7% of the UK’s power for 65 years with no carbon discharges.
“Consumers won’t pay a penny until Hinkley is built; it will provide clean, reliable electricity powering 6 million homes and creating more than 26,000 jobs and apprenticeships in the process,” the spokesman added.
EDF Energy also supported the agreement, saying it is good which will keep the cost of electricity steady.
“The strike price agreed with the Government has not changed. HPC will be good value for consumers compared with alternative choices available in the 2020s,” it said.