The Government has given the go-ahead for the first of a planned new generation of nuclear power plants in the UK, in Somerset.
Low-carbon energy projects will bring major investment, supporting jobs and driving growth
But construction of the first new nuclear reactors since the 1990s depends on a deal being struck between the Government and energy giant EDF over the price the company will get for electricity generated at the site at Hinkley Point, Somerset.
EDF said intensive discussions were ongoing on the guaranteed “strike” price for power generated at the plant, consisting of two reactors – which will supply enough electricity for five million homes.
Under electricity market reforms, low-carbon power such as nuclear reactors will have long-term contracts with a guaranteed price for their electricity, to give investors certainty to invest in projects with high capital costs.
The move to grant planning permission for Hinkley Point C announced was welcomed by unions and local councils in the region, who said it would generate tens of thousands of jobs and boost the economy.
But environmental groups criticised the Government for pressing ahead with new nuclear plants, warning that the price agreed for the electricity would be too high and raising concerns over the lack of plans for dealing with nuclear waste.
Energy Secretary Ed Davey said affordable new nuclear would play a “crucial role” in ensuring secure, diverse supplies of energy in the UK and decarbonising the electricity sector and the economy.
He said: “It’s vital to get investment in new infrastructure to get the economy moving. Low-carbon energy projects will bring major investment, supporting jobs and driving growth.
“This planned new nuclear power station in Somerset will generate vast amounts of clean energy and enhance our energy security.
“It will benefit the local economy, through direct employment, the supply chain and the use of local services.”
Business group CBI’s chief policy director Katja Hall said the planning permission for the new reactors was a big step forward on a critical energy infrastructure scheme.
“Major projects like this not only help us to overcome our energy challenges, but provide a real boost to growth, creating thousands of jobs directly and through the supply chain.
“A balanced energy mix is essential in order to ensure secure, low-carbon and affordable supply in the future, and new nuclear is a key part of this.”
Hinkley Point C, which will be operated by EDF subsidiary NNB Generation, will be the first new nuclear power plant in the UK since Sizewell B, which started generating electricity in 1995.
It is estimated the project will create between 20,000 and 25,000 jobs during construction and 900 permanent jobs once in operation, but the costs of the scheme are thought to be in the region of £14 billion.
The decision to grant a development consent order is in addition to a separate process of health and safety assessment, with permits awarded by the Office for Nuclear Regulation and the Environment Agency.
Mr Davey said EDF had now secured the majority of consents it needed to build and operate the plant.
Progress is now dependent on the financial negotiations which include the strike price and securing agreement on funding by the energy company for decommissioning and onsite waste management and contribution towards long term storage of waste.
EDF Energy chief executive Vincent de Rivaz said receiving planning permission for the project was a “huge achievement” which set up the opportunity to provide jobs, skills, emissions reductions and energy security for the UK.
But he said that to make the opportunity a reality there was a need to reach agreement swiftly on the “contract for difference” that will set out the guaranteed strike price paid for the electricity generated.
“It must offer a fair and balanced deal for consumers and investors. Intensive discussions with the Government are taking place and agreement is still possible,” he said.
He told employees that for consumers the price should be fair compared to other forms of low-carbon power and expected electricity prices for coming decades, and investors needed a fair return for the risk they were taking.
But Greenpeace executive director John Sauven argued that Hinkley Point C would lock consumers into higher energy bills, through a strike price that he said was expected to be double the current price of electricity.
And he said: “With companies now saying the price of offshore wind will drop so much it will be on par with nuclear by 2020, there is no rationale for allowing Hinkley C to proceed.
“Giving it the green light when there is no credible plan for dealing with the waste could also be in breach of the law,” he warned.
Nuclear power provides around one fifth of the UK’s electricity, but most of the existing plants are due to close by 2023.
Efforts to get the private sector to build a new generation of reactors have suffered a series of setbacks, including three of the Big Six energy companies abandoning plans for involvement in the sector in the past year.