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The final contract for the new Hinkley Point C nuclear power station is “weeks, possibly months away” from being signed, according to the energy secretary.
Speaking to the House of Lords Science and Technology Committee, Ed Davey said that the final deal on the £16 billion nuclear power station was imminent.
The government and EDF Energy have agreed a strike price of £92.50/MWh for the 3.2GW plant, which will fall to £89.50/MWh if they make a final investment decision to go ahead with another power station at Sizewell.
Davey said the new power station, which is expected to be built by 2023, will help to “close the gap” left by the eight nuclear power stations that are due to close by that year.
The energy secretary also defended the cost of the deal – which has been criticised as “the most expensive power station in world” by equity investors.
Davey said compared to the price of electricity generated from coal or gas, with the added cost of pollution, the Hinkley Point C agreement represents “good value for money”.
“We have been pretty rigorous and robust in calculating the price we propose to close the deal on with other comparators,” he said.
However, Davey added: “Would I like a lower price? Of course. But we are pushing for lower prices all the time.”
The energy secretary also stated that the government was analysing the potential role of an energy system architect.
He told peers: “We want to see that explored. It is relatively early days and we need to see what it might actually look like.”
Davey also suggested that this role could be “grafted” onto one of the market operators – such as National Grid – rather than requiring the creation of a new quango.
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