Commenting on the announcement that the European Commission has given the new nuclear power plant at Hinkley Point in Somerset EU state aid approval, Caroline Williams CEO Norfolk Chamber of Commerce said: “After months of uncertainty, businesses will be relieved to know that the nuclear power plant at Hinkley Point has finally been given the green light.”
“The new nuclear plant will bring supply chain opportunities to local businesses in Somerset but also in Norfolk where there is already considerable expertise gained from working on Sizewell B. This decision is a major milestone in the move to get the same approval for Sizewell C which will bring considerable economic benefit and jobs to Norfolk and Suffolk. “
John Longworth, Director General of the British Chambers of Commerce (BCC) said: “While there are clearly many positives to talk of, we mustn’t forget the fact that delays, caused by indecisive governments, has been at the public expense. All parties must stop using energy policy as a political football, and instead work towards adopting a comprehensive, long-term strategy to guarantee the security of energy supplies.”
The agreement for Hinkley Point C
The Commission found that the long-term contract (Contract for Difference) and the guarantee constitute an appropriate and proportionate way for the UK to meet its need for secure, low carbon energy. The Commission’s decision leaves the key elements of last October’s agreements unchanged whilst it has reinforced measures designed to share potential future benefits with customers.
- The “strike price” for Hinkley Point C remains set at £92.50/MWh or £89.50/MWh if the planned power station at Sizewell goes ahead
- The contract will last for 35 years
- The strike price is fully indexed to inflation through the Consumer Price Index
- The project will be protected from certain changes in law
As proposed in October 2013, the Contract for Difference already contained a series of “gainshare” mechanisms in which customers would benefit if the project construction costs or equity returns were more favourable than forecast. The Commission, the UK Government and EDF have accepted reinforcement of the “gainshare mechanisms” in the package today approved by the Commission. EDF Energy has also committed that electricity from the proposed power station will be sold at market price and recorded separately from EDF Energy’s other electricity production. EDF has agreed that the fee for the Government’s proposed Guarantee of project debt be paid at commercial rates. The agreed guarantee fee delivers the equity return required by investors.
EDF chairman and CEO Henri Proglio said: “The approval by the European Commission is a major milestone for the Hinkley Point C project. Now EDF and partners have to finalise the agreements needed to reach a final investment decision. Building EPR reactors in the UK will provide huge benefits for both countries in terms of job opportunities, economic growth and skills, further strengthening France and United Kingdom fruitful partnership.”
EDF Energy Chief Executive Vincent de Rivaz said: “The approval of the European Commission demonstrates that the proposed package of agreements between the Government and EDF is fair and balanced for investors and consumers now and for the long term. “The Commission rigorously examined the costs of the project in detail, potential returns for investors and benefits for customers. The engagement with Brussels was thorough, demanding but constructive.”
