Monday, 13 August 2012

EDF implies cost of Hinkley C could be higher than £100 per MWh

It was good news for offshore wind as EDF, in an article in the Daily Telegraph, 'suggested that....costs for Hinkley Point..... could be higher' than £100 per MWh. This was in an article in which the CEO of EDF said that they would be asking for less than £140 per MWh for the power plant at Hinkley C.

See the paragraph : 'Mr de Rivaz suggested the "most credible" cost estimates were those by the Committee on Climate Change (CCC), which last year estimated new nuclear costs at up to £100/MWh. But an EDF Energy spokesman stressed that things had "moved on" since the CCC's report, and suggested costs for Hinkley Point, as the first plant of its kind in the UK, could be higher.':

The reason that this is good news for offshore wind is that whatever the Government did decide to offer as a strike price for nuclear power plants would also have to be offered to offshore wind, if the policy was to stand up politically. The Government has set an aspiration of bringing offshore wind down to a cost of £100 per MWh, so if Hinkley C were to get the over £100 MWh that EDF wants, then offshore wind would have to get at least the same - and remember that EDF is likely to wants a longer contract length than offshore wind developers are likely to get. So £100 per MWh for a 15 year contract for offshore wind is really worth a fair bit less than £100 per MWh for a nuclear contract of 25-30 years. And of course onshore wind is likely to get around £80 per MWh for 15 years, or less if the anti-windfarm Tories get their way.

Can the Government really offer nuclear power more than £100 per MWh?....I doubt would certainly be highly interesting (for offshore wind in particular) if they did! Of course if I was EDF I might also, for public relations reasons, deny that the company could ask for more than £140 per MWh, because the Government cannot really offer them that much anyway.