Thursday, 27 June 2013

Government signals (not-so-good) rates for wind and (apparent) blank cheque for Hinkley C

The Treasury has announced good rates for onshore and offshore wind and also tidal stream. Although it has not announced a price for new nuclear it has said that Hinkley  C is eligible to receive   a Treasury guarantee to underwrite Hinkley C. This raises the prospect that new nuclear will, despite the consistent denials by Ed Davey, be given not only a price guarantee but also a costs guarantee that amounts to a blank cheque. And a much longer contract to boot compared to renewables.

The price of £95 per MWh for onshore wind will allow the schemes in the pipeline to be built and also make the community benefit commitments suggested by Government affordable. The price of £155 per MWh falling to £135 for offshore wind should also allow the offshore wind programme to move forward.

Note added later: These headline figures appeared to be less more generous later on when the 'small print' became visible in that the contract length has been reduced compared to the RO (from 20 to 15 years) and the inflation will be only partly uprated. In effect, in reality, these figures represent a CUT compared to the Renewables Obligation of close to 15 per cent.

But with guarantees for construction costs and a longer contract nuclear is still being offered a better deal compared to wind power. We await further details on the form of the blank cheque that the Government is considering to give to EDF.

See the quote about nuclear on page 67
'the proposed new nuclear power station at Hinkley Point C is eligible for a UK Guarantee, in addition to over 25 projects worth £13.5 billion which have also been prequalified for the UK Guarantee Scheme;'

See the details of renewable funding on page 30


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