UK set to sign off Hinkley Point tomorrow after French go-ahead

A LEGALLY binding contract committing UK consumers to subsidise Britain’s first new nuclear plant in a generation is expected to be signed tomorrow, after the board of EDF meets to approve the £18bn project today.

The much-delayed construction of two reactors at Hinkley Point in Somerset is expected to be given the go-ahead by the board of the French energy giant at a meeting in Paris this afternoon, despite the opposition of unions.

The decision will pave the way for Greg Clark, the new Business and Energy Secretary, to sign a 35-year subsidy deal tomorrow, marking the point of no return for the UK on the highly controversial project that could eventually provide 7pc of the country’s electricity.

If the Government were to change its mind once the contract is signed, the UK could be liable to pay French state-controlled EDF billions of pounds in compensation.

The subsidy contract guarantees EDF a price of £92.50 for every unit of electricity produced for 35 years, a deal that on current estimates will see consumers pay £30bn in subsidies, over and above the wholesale price of power.

Ministers estimate that every household will pay about £10 a year on their energy bills to fund the subsidies when the plant starts generating.

EDF is expected to confirm today it still expects to produce the first power from the plant in 2025, despite the delay in taking a final investment decision that was due before the end of last year.

Labour’s shadow energy secretary Barry Gardiner last night issued an 11th-hour plea to the Government not to sign the contract in its current form, which gives EDF significant leeway to delay completion of the project for up to eight years.

EDF can still secure the full 35-year contract if it produces the first power any time until 2029. Thereafter the contract would be shortened by one year for every further year of delay, but could only be cancelled without penalty for the UK if Hinkley was still not generating by 2033.

Mr Gardiner said it was “extremely dangerous” of the Government to give EDF “an open-ended cheque” and said EDF should face penalties for every year of delay beyond 2025.

When first envisaged in 2007, EDF said Hinkley would be generating power before Christmas 2017.

Jesse Norman, a junior minister at the business and energy department, this week reiterated the Government’s support for the project. “Hinkley Point C is a good deal for consumers – it will provide reliable energy at an affordable cost,” he said.