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Government is rumoured to have negotiated the strike price for nuclear below £100/MWh, in a move that could make new nuclear more politically palatable.
The Telegraph reported, without quoting sources, that the Department of Energy and Climate Change is close to agreeing with EDF a strike price of between £95.00/MWh and £99.50/MWh for Hinkley Point C. Confirmation of the deal, to guarantee power prices using contracts for difference, is not expected until March.
The strike price will be critical to the prospects for EDF’s proposed Hinkley Point C new nuclear plant. Previous figures cited for nuclear have been as high as £160/MWh.
Roland Vetter, an analyst at CF Partners, said: “The number coming down makes it more likely that the UK goes ahead with new nuclear, from the political side. A lower number will be easier for the public to digest.
“On the other hand, a lower number does make it a bit more questionable whether EDF will go ahead.”
Vetter added that it was important to look beyond the headline figure at how much of the project risk, primarily around construction, would be shared between consumers and investors.
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