Nuke plant blast

Watchdog raps Government over Hinkley deal

THE Government has been slammed by its own spending watchdog over a nuclear plant deal that could send household bills soaring. The National Audit Office has published a damning report over ministers’ backing for the controversial Hinkley Point C power station in Somerset. The initial bill for building it has ballooned to £18billion, with the operating date delayed until 2025. But the NAO reckons the final cost in running bills and decomissioning could be nearly £200bn. French energy giant EDF and China’s General Nuclear Power Group (CGN) will foot the build cost – but under their deal with the government they’re guaranteed to rake that back through a “Contract for Difference”. This ensures they’re paid a guaranteed fixed price – a “strike price” – for the electricity Hinkley will produce, currently double the wholesale price at £45 per megawatt hour. If the wholesale price remains below the strike price, they will get up to £30bn over the station’s 35year lifetime through a tax on household energy bills. The Government estimates this will add £10 to £15 a year to bills, but it could rise to £24 at today’s prices. The report slammed the Government for not looking at alternative funding methods, and brands the economic case for Hinkley “marginal”. Amyas Morse, head of the NAO, said: “The department has committed electricity consumers and taxpayers to a high cost and risky deal in a changing energy marketplace.” EDF said: “Consumers won’t pay a penny until the power station is operating.” Mike Clancy, general secretary of Prospect union, said the report was “deeply worrying”.