The Government will, later today, announce a deal to build Britain’s first nuclear power plant in 25 years. The last Nuclear power plant, Sizewell-B, began construction in 1987 and was finally put into commission in 1995.
A year’s worth of negotiations with EDF may finally be about to pay off regarding the building of two nuclear power plants at Hinkley Point in Somerset. The breakthrough in negotiations came as ministers agreed on a controversial and crucial ‘strike price’ which is set to give EDF a stable and guaranteed rate for producing low carbon electricity. The premise is a simple yet effective one; the Government will compensate investors if the wholesale prices fall below the ‘strike price’, and if prices grow above the strike price level, EDF will pay the difference back to consumers.
These plants are a pivotal step for the UK in trying to reach its low carbon emissions targets by shifting dependance away from fossil fuels - something which has been in the spotlight recently over growing public concern. A string of party conferences saw Labour promise a 20 month energy ‘price fix’ if they were voted into power in the next election. George Osborne has also eased the transition by announcing that Chinese firms will finally be able to invest in nuclear energy projects in the UK, even becoming major shareholders. This energy crisis is growing ever higher on the political agenda following recent price rises from some of the ‘big six’, and may prove pivotal in deciding the outcome of the next election.
The funding from China not only gives the UK a potential financial boon in the sector, but also gives the UK an edge when it comes to the design and manufacture of the plant. Osborne visited the Taishan plant in China recently and it’s expected that the new plant at Hinkley will resemble it in a big way. This is a bold step by the Government and could result in an increase in employment and lower electricity costs for consumers as the country moves into a cleaner, electrical age.
Naturally, there are detractors from the plans. Anti-nuclear activists who live near Hinkley have claimed that they have been misled during proceedings regarding the potential financial benefits of the project. Concerns seem to center around the length of time it will take to get the plant under way (potentially as late as 2025) and the subsidies the Government may have to pay to Chinese investors and EDF for the foreseeable future. Recent announcements have seen energy prices go up as much as 9% without warning and economic tensions are sky high.
Nick Clegg has called out for the big six energy companies to come clean about the price rises and explain them to the general public. On a recent Sky News broadcast he said,
“Clearly the companies need to justify the bill increases they are now announcing. It cannot be right that people who are really struggling - many, many people still struggling to pay their weekly, their monthly bills, where electricity and gas bills this winter are a looming worry. It can’t be right that those bills are increased for the households in our country and yet it is all rather opaque about what drives these increases.”
While many people would agree with Mr Clegg, it’s unlikely that the energy companies are going to offer such an explanation and time is running out for the Government to gain public trust surrounding the ever growing energy debate.