The signing of a nuclear deal between EDF and the government is a landmark event for power generation. Today’s go-ahead for the Hinkley Point C plant shows ministers are prepared to commit Britain to provide decades of guaranteed financial returns (paid for by you and me as energy users) to companies in return for winning huge slugs of investment for new power stations.
The move, which also involves Chinese cash, should encourage other major investors such as Hitachi of Japan to proceed with their own nuclear plans, giving some longer-term certainty to power supplies. But it will do nothing to tackle the possibility of short-term power blackouts.
Ministers insist that the commitment to provide Hinkley Point with a guaranteed price of around double the market rate is not a subsidy. The final figure of £92.50 is a considerable step up from the £80 per MWhr said to be on the table when negotiations began in earnest, and that figure is said by some calculations to be worth around £80bn in guaranteed revenues, the cost of nine Olympics.
Critics will accuse the government of providing subsidies to an old technology that should not need handouts, while pointing out the safety dangers and the unsolved waste disposal problems raised by new nuclear. Questions will also be asked about the wisdom of providing a country alleged to be involved in cyber-spying, access to sensitive energy infrastructure via the involvement of a state-owned firm.
The biggest plus for nuclear is that something definite has happened at all: a speculative proposal from Tony Blair in 2006 has finally been transformed into a concrete plan to spend £14bn building a new plant today.
Nuclear power had been consigned to history by most policymakers in western Europe since a partial meltdown of the US plant at Three Mile Island in 1979 and then a catastrophic accident at Chernobyl in the Ukraine seven years later sent the equivalent radioactive fallout of 20 Hiroshima bombs as far afield as the Scottish Highlands.