The government’s deal with EDF for a new nuclear power plant at Hinkley Point will “hopefully mark the start of a nuclear power revival” according to the Institution of Mechanical Engineers (IMechE).
EDF agreed to a strike price of £92.50/MWh for the Hinkley Point C plant – £89.50/MWh if the firm also builds the Sizewell C nuclear plant.
Dr Tim Fox, Head of Energy and Environment at IMechE said: “Nuclear is a key electricity source for the future as it provides reliable, low-carbon electricity and new nuclear plants will be used as replacements for the country’s ageing nuclear fleet, the bulk of which are set to retire by the end of the decade.”
He added: “This announcement is a welcome step towards giving the UK nuclear engineering and research community confidence that the nation has a future in this sector and should act as a catalyst for encouraging the other consortia, Horizon Nuclear Power and NuGen, to continue with the plans for new plants at Wylfa, Oldbury and Moorside among others.”
The deal was also welcomed by the Confederation of British Industry (CBI). Director-General, John Cridland said: “This is a landmark deal which will help us meet our future energy challenges, while boosting jobs and growth.
“New nuclear plants must be a fundamental feature of our future energy landscape and Hinkley Point C is the starter gun to securing the investment we need.”
He added: “Amid understandable public concern about rising bills, it’s important to remember this investment will help mitigate the impact of increasing costs. The fact is whatever we do, energy prices are going to have to go up to replace ageing infrastructure and meet climate change targets – unless we build new nuclear as part of a diverse energy mix.”
Energy procurement specialist Schneider Electric was more cautious. David Hunter, energy analyst for the firm said: “The guaranteed ‘strike price’ sets a bar decades into the future that is some 80% higher than current forward prices in the markets and means that bills will rise from current levels as a result. However, with Hinkley Point C not due to start generating until 2023, any impact won’t be felt for some time to come.
“Nuclear power arguably ticks two of the boxes in the energy ‘trilemma’ as it is low carbon and provides secure ‘always on’ baseload power. However the jury’s out on the third strand – that of affordability.”
The consumer group Which? has called for a “refund clause” to be included in the deal in case it turns out the Government has overpaid.