Plans to spend £24.5 billion building Britain’s first new nuclear power station in two decades are set to be investigated by Parliament’s spending watchdog, The Independent understands.
A deal that will give the final go-ahead for Hinkley Point C in Somerset is due to be signed by ministers when the Chinese premier Xi Jinping comes to London next month. The plan, which is being partly funded by China, is underwritten by £2 billion of Government loan guarantees while the huge cost of the plant will ultimately be paid for by consumers in their bills.
Minister have agreed to pay EDF Energy who run the plant £92.50 per MW hour of electricity it generates – more than double the current wholesale price of £40.
But the plan now faces a potentially damaging investigation by the National Audit Office followed by public hearings after Labour’s new Shadow Energy Secretary Lisa Nandy called for it to be subject to Parliamentary scrutiny.
She said, at current estimates, building Hinkley would be the most expensive power station built anywhere in the world – costing more than the Olympic Games, Heathrow Terminal Two and Cross Rail combined.
The investigation is likely to focus on whether the Government has chosen the right type of reactor to build and whether it would have made more sense to pay for the construction costs upfront through taxation rather than use private finance that will be paid back through bills.
“I am worried about the impact of this investment on energy bills…with too much of the costs shouldered by the most the most vulnerable in society,” she wrote in a letter to the PAC’s chairman Meg Hillier.
“(There is) an opportunity for the PAC to scrutinise the proposed agreement and investigate whether a more competitive process could ultimately lead to a more cost effective agreement for consumers.”
The Independent understands that Ms Hillier is minded to agree to Ms Nandy’s request with a formal announcement expected after the deal is officially signed off by the Government.
When built Hinkley C will produce 7 per cent of Britain’s electricity needs, or 3,200 MW of nuclear power. Green groups have argued that the government could create 20,000 MW of onshore wind-powered electricity or for the same price although this has been questioned by energy experts who say a nuclear ‘baseload’ of electricity is necessary to ensure consistency of supply in a ‘carbon free’ grid.
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