Hinkley Power Plant September 2016
Thank you for contacting me recently regarding the planned Hinkley Point C (HPC) nuclear power plant [and the related Greenpeace campaign].
I believe that new nuclear has a role to play as part of our low carbon infrastructure and I welcome the contribution HPC could make to meeting the UK's energy needs, as well as the jobs it could provide. However, I do not believe that this should come at any price and I appreciate the concerns you raise.
As you may know, EDF Energy confirmed its decision to go ahead with building HPC on 28 July 2016. However, following EDF's decision, the Government announced, at a day's notice, that it was delaying signing the final agreement for HPC and would be conducting a review into the project, to report in the early autumn.
I am concerned that the Government has seriously mismanaged the public interest in HPC. The project is already eight years delayed and has serious technical problems. Furthermore, there is still no assurance that it will be operating by 2025, when coal is no longer supplying the base power we need. After two years of rejecting calls, including from the Opposition, for a plan B, I believe the Government must now set out a clear agenda for the future of nuclear power in the UK, including a root and branch review of the HPC project.
I am particularly concerned at the cost to consumers of the Government's agreement with EDF. In 2013, the Government agreed a "strike price" of £92.50 for every megawatt-hour of electricity generated by HPC for 35 years. I believe this is far too high, particularly when the cost of other low carbon energy sources, such as wind and solar, has been falling to record lows and when the Government has been cutting support for these more affordable clean energy technologies and has also ditched support for low-carbon technologies like Carbon Capture and Storage.
The National Audit Office estimates that a projected fall in wholesale electricity prices means that the cost of the Government subsidy for electricity provided by HPC has risen from £6.1 billion to £29.1 billion, while the Government itself estimates the whole life cost of HPC at £37 billion, up from an estimate of only £14 billion last year. Furthermore, if HPC is further delayed, we would have to build other power plants to fill the supply gap, while still having to pay EDF for energy we no longer needed.
I believe the Government must renegotiate its contract with EDF, including by insisting on a price taper so that customers pay less for any further delay to HPC. The Government should now act to ensure that it does not give EDF an open-ended commitment and that consumers are protected.
Thank you once again for contacting me and for sharing your views. I can assure you I will continue to hold the Government to account on Hinkley Point C and its wider energy policy.