Financial uncertainty clouds future of new UK nuclear power plant at Hinkley

Hinkley Point nuclear power station signThe future of the proposed new Hinkley Point C nuclear plant in Somerset is under a cloud as Areva, a shareholder in the project and the designer of the proposed reactors, has seen its shares plunge by almost a quarter.

Areva warned it must suspend future profit predictions because of problems centred on a similar power station project in Finland.

Both that scheme at Olkiluoto and another at Flamanville in France are massively over-budget and over-schedule, forcing Areva to consider whether it needs an injection of new cash to survive. Areva declined to comment.

Meanwhile, the CBI is today calling for the rUK Government to make a final decision on its guarantee/ subsidy for the proposed Hinkley Point C nuclear power station as part of a package of measures to boost the UK economy.

Hinkley Point C in Somerset will be the first new nuclear power station to be built in the UK in a generation, and could be eligible for consumer funded payments of around £1 billion per year – totalling around £35billion over the 35 year length of the contract. This is compared to the 15 year contracts being offered to renewable energy projects.

The European Commission warned  earlier this year that Hinkley C will push up consumer bills, stating the power station “could hardly be argued to contribute to affordability – at least at current prices, when it will instead and most likely contribute to an increase in retail prices”.

The Commission’s warning was backed by the Delivering Renewable Energy Under Devolution report, published late last year, which found that the UK Government’s recent decisions on nuclear power could increase energy bills.

Peter Atherton, energy company analyst at Liberum Capital told The Guardian that Areva appeared to be in deep trouble and this must be a matter of grave concern to the British government. He said: “The [UK] government has commissioned the most expensive power station in history and the only company that can provide the equipment is in trouble. That is a big problem for Hinkley.”

Last night, Mike Weir, MP – the SNP’s Energy spokesman at Westminster – commented: “Despite the mounting evidence that it is hugely expensive with other stations going vastly over budget and  being years behind schedule, the UK government is determined to continue to throw billions of pounds into promoting new nuclear.

 “By diverting money away from renewables to new nuclear the UK Government’s plans are also damaging the renewables sector.

“Scotland neither needs not wants new nuclear. We have huge potential in renewables that can generate clean green energy for the future.”

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