Saturday, 30 June 2012

Government 'may' give details of strike price for nuclear contracts

In answer to questions from Lib Dem MP Martin Horwood the Government said it 'may' give details of the price paid for electricity generated by Hinkley C. The implication, however, is that it may not give details! Despite this the Government insist that  it will give full details of terms and conditions of the contracts to EDF. This rather vague response on this crucial detail does not satisfy those wanting to see full transparency regarding deals made with EDF. There is still no guarantee that we will get to hear the vital detail of what price is paid to EDF for electricity generated at Hinkley C. We need this detail if we are to calculate the impact on consumer bills and compare the level of support given to nuclear power and other renewable energy sources such as onshore wind, offshore wind and solar power.

Charles Hendry said:

'The Department has not provided EDF Energy or NNB Generation Company Ltd with any indications regarding the strike price that could be received for electricity produced at Hinkley Point C.
Under the Final Investment Decision Enabling Project set out in the Technical Update on Electricity Market Reform published in December 2011, the Government may provide information on strike prices for low carbon generation projects that need to make final investment decisions before legislation implementing EMR takes effect. The terms of any investment instrument or contract for difference issued for electricity produced at Hinkley Point C will be subject to negotiation focusing on delivering a fair deal which is affordable, provides clear value for money, and is consistent with the Government's policy on no public subsidy for new nuclear. There will be full transparency over the terms agreed for any investment instruments or contracts for difference that are issued.'

Ed Davey has told the DECC Select Committee enquiry that nuclear power would not get higher prices than renewable energy sources. But does this include wave power, which as a very new technology, will receive premium support? And would this take account of special deals made with EDF, for example if, as some nuclear supporters have argued, EDF got state backed loan guarantees that would bring down the interest rates it is paid and therefore the strike price it needs?

Of course, as the previous blog post argues, it is impossible to see how Hinkley C is going to be financed in practice. The actions (as opposed to public relations output) of EDF also lend support to this since they have postponed their decision about whether to build Hinkley C.

You can see the responses to Martin Horwood's questions on:

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