EDF seeks backing over nuclear power plant

Hinkey Point request.

New Statesman
Photograph: Getty Images.

EDF Energy has asked the HM Treasury to back the proposed multibillion-pound nuclear power plant at Hinkley Point in Somerset arguing the the plant is among the UK’s top five infrastructure projects.

The company, which is planning to construct new nuclear reactors in the UK, has urged the coalition government to underwrite some of the plant’s financing in an effort to make it attractive to third-party financial investors.

The Financial Times, citing a familiar person, said that formal discussions between EDF and the government would start only once the two sides had agreed on a fixed price for the nuclear power generated at Hinkley.

The governmant said earlier that there will be no public subsidy for new nuclear reactors in the UK.

Centrica, owner of British Gas, recently said it will not exercise its option to take a 20 per cent stake in EDF’s reactor-building programme due to rising costs.

The country’s current energy bill seeks to secure the necessary investment in low-carbon power generation by guaranteeing nuclear and renewable developers a fixed strike price for their electricity.

On the other hand, nuclear industry analysts feel that guaranteed prices might not be enough and more support for projects involving billions of pounds in upfront costs should come from the government.

HM Treasury’s UK Guarantees scheme, which was lauched in July 2012, is intended to underwrite up to £40bn of infrastructure investments. Meanwhile, the government has said £110bn of investment in Britain’s energy infrastructure will be needed over the next ten years.