Can you justify that? As I understand it we are guaranteed to pay a lot...
https://www.power-technology.com/projects/hinkley-point-c-nuclear-power-station/?cf-view says
I believe that the
current price of electricity for the year ahead is "only" £75/MWhr (and what has inflation been since 2013?) and renewables have driven the price down year on year and will continue to do so.
It's a very poor deal, and to my mind it shows just how bad for the public this pretence of the private sector funding infrastructure really is.
As stated above the actual generation costs of an EPR are about £20/MWh, they could over time come down from that if we had a very large fleet see cost decreases in other forms of energy.
As I stated above Sizewell C is planned to be completed using a RAB, HPC was done under a contract for difference which is essentially a fixed price deal for 40 years after it expires the plant will then just deliver electricity at market rates for at least the next 40 years beyond that. The issue with CFDs is that they place "all" the risk on the developer and thus incentivise them to seek the highest fixed price.
In wind/solar there are multiple developers so price competition can be used to bring the bids down, the CFDs can however be handed back at any stage so if development prices go up developers can always walk away. In nuclear you have no competition hence the high prices.
However to go back to RAB, if Sizewell C costs £32 billion to build (the same as HPC, it should be cheaper) then this would be paid up front by bill payers. Typically the discount rate for a long term public project according to the treasury would be 3.5%. If we spread that out over a 60 year lifetime of the plant then the cost per MWh of construction drops to £50/MWh or £75/MWh all in. There are some caveats to apply firstly the £32 bn figure for HPC I suspect includes interest during construction at commercial rates, if you built it by RAB you'd pay the developer back every year or so putting the money on the lower interest rate which would bring the cost down substantially.
The other more broad point is that the first 3GW of on and off shore wind was financed at far higher costs per MWh than HPC.
Second point is that EDF and CGN can likely borrow in the long term at rates commensurate with their states, the CFD cost just assumes that they can't and everything is funded by a commercial loan. So to a degree the whole HPC project is an arbitrage play where the UK consumer transfers money to France and China!
Wind and solar remain the cheapest way to generate electricity in the UK as gas prices are around 100% higher than before the global energy crisis.
www.carbonbrief.org
The costs of renewables dropping is not a given, material costs have been rising, grid connections are also rising as locations get increasingly remote.
The advantage of the way HPC was funded is the price is fixed, regardless of how much the costs of building it spiral.
The issue as the national audit office point out is what happens if EDF pull out with the plant half finished because cost escalates? We still want the plant so its likely that the government would bail it out in some way even if they purchase it from a bankruptcy.
