EDF confirms it wants 40-year contracts to build nuclear plants (UK)

[kristopher]

EDF confirms it wants 40-year contracts to build nuclear plants
French-owned firm in talks with ministers over long-term subsidy guarantees as Ofgem warns of steep hike in energy prices

Electricity firm EDF has confirmed it wants the UK government to sign 40-year contracts to support building new nuclear reactors in Britain – as the national energy regulator warned prices are likely to rise higher than expected.

The French-owned company is in talks with ministers over "contracts for difference" funding, under which the government guarantees generators will be paid a minimum price for electricity from new nuclear plants: if the market price falls lower than this "strike price" then a surcharge will be added to customers' bills; if it rises higher there would be a refund.

The Guardian reported on Tuesday that in order to keep the strike price at below the politically crucial £100 a megawatt hour, ministers and officials are proposing the contracts will last for up to 40 years, double the original timescale. On Tuesday, it emerged that EDF's chairman, Henri Proglio, told analysts and investors that the company was in talks over 40-year contracts when the company published its annual results in Paris last week.

The UK's Department of Energy and Climate Change (Decc) said on Monday no final agreement had been reached. However insiders acknowledge such long deals could have trouble passing EU state aid rules, and nuclear critics who are already angry the government has reneged on a promise that there would be no public subsidy for new nuclear power...

More at http://www.guardian.co.uk/business/2013/feb/19/edf-40-year-contract-nuclear-plant

[kristopher]

1. Reaction from Friends of the Earth

By offering the nuclear industry a 40-year subsidy (Ministers offer nuclear reactor deal until 2050, 19 February), the coalition is backtracking on its 2010 promise not to make the public pay for new nuclear, and tying us into decades of increasingly expensive, risky power.

Even if the nuclear industry delivers on time, new reactors won't be ready until the 2020s, and could end up costing consumers tens of billions of pounds. Meanwhile, the government's dash for gas is driving up our fuel bills, and giving new gas plants a free pass to pollute by allowing them to pump out climate-changing carbon till 2045.

It's outrageous that nuclear and gas should be given such lengthy guarantees when renewable energy faces a funding cliff-edge after 2020. Britain has abundant wind and marine energy resources, and should be a world leader in developing and exporting expertise. MPs must act decisively where the government hasn't, and back a 2030 clean power target in the energy bill that will tackle climate change, create green jobs and provide energy we can all afford.
Andrew Pendleton
Head of campaigns, Friends of the Earth

http://www.guardian.co.uk/environment/2013/feb/24/nuclear-energy-safer-cleaner-healthier-uk