David Cameron has hailed the UK government agreement with French-owned EDF to build the first new British nuclear power station in 20 years, saying it was a very big day for Britain and would kickstart a new generation of nuclear power in the UK.
The energy secretary, Ed Davey, claimed it was a great deal for consumers and would result in energy bills falling by more than £75 by 2030.
He added: “If we don’t make these essential investments … we’re going to see the lights going out.”
The 35-year deal, struck at £92.50 per megawatt hour, is twice the current wholesale market rate for electricity, and will be attacked by some as a massive subsidy to help another non-carbon fuel, with the funds going to the French taxpayer and the Chinese government, that has a minority stake to build the new plant at Hinkley C in Somerset.
With the deal between UK government and EDF announced on Monday morning, Cameron said: “This is a very big day for our country: the first time we’ve built a new nuclear power station for a very long time.”
He said the deal would be the first of many “kick-starting again this industry, providing thousands of jobs and providing long-term, safe and secure supplies of electricity far into the future”.
The subsidy inherent in the strike price reflects the risk in constructing the plant, uncertainty over the future market and the need to reduce UK’s dependence on carbon fuels, such as coal and gas.
But the deal comes at a politically sensitive time as the government fends off criticism that government imposed green subsidies are pushing up the price of electricity.
Cameron has rejected a Labour proposal for a 20-month government-imposed freeze on energy prices.