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This blog post was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Hinkley Point C State Aid decision

Posted by: , Posted on: - Categories: Nuclear

Now more than ever, the UK needs a diverse, low-carbon and secure home-grown energy mix.

There has been more than £30 billion of investment announced in low carbon electricity generation projects since 2010, and we expect another £40-50billion of investment in renewable electricity by 2020.

New nuclear plays a key part in our energy future and today’s decision by the European Commission to approve the Hinkley Point C State aid case is a significant step in the project and a big vote of confidence for our electricity market reforms. It is also a welcome endorsement of Member States’ rights to determine their own energy mix and in the UK it means a reduction in our emissions by 9 million tonnes of CO2 per year, helping to meet climate targets.

Our plan is working: we are opening the door to much needed investment in the UK’s energy market while keeping the lights on. There was a real risk back in 2010 that an energy crunch would hit Britain in the middle of this decade and lead to damaging power cuts. These huge investments, brought forward by our electricity market reforms, mean that we have avoided catastrophe.

For the first time, a nuclear power station will be built in this country without money from the British taxpayer but at a competitive rate for industry. This will be supported by the reforms we’re carrying out to the UK’s energy market which will see us creating one of the most attractive electricity investment markets in the world.

Contracts for Difference like the one being negotiated for Hinkley Point C, help to incentivise electricity generators without distorting the market and have already been approved as the right mechanism for renewables technologies. It means that we can provide greater confidence and stability for our future electricity generation – it’s a certainty any investor would want before committing money to large energy infrastructure projects.

Whilst there’s still a way to go before construction can officially start in Somerset, it will mean around £16bn of investment coming into the country and the creation of 25,000 jobs, which is brilliant news for the South West and for the country as a whole as UK companies could benefit from getting more than 50% of the work.

Today’s decision should give confidence to new nuclear investors that the same benefits can be realised at the other four new nuclear sites planned for the UK. We will continue to push for a fair deal for consumers and industry so that we can successfully build and operate five new nuclear power stations that will help us achieve secure, reliable and low-carbon energy by contributing around 40% of our electricity supply, and create outstanding opportunities for the UK economy.

The Commission has given its vote of confidence, now we look to industry to build on this fantastic opportunity. And as the UK competes in the global race, this underlines the confidence there is in Britain as one of the most attractive investor markets in the world.

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  1. Comment by Jo Brown posted on

    Ed Davey says "a nuclear power station will be built in this country without money from the British taxpayer". This is not true; the £16billion would be a taxpayer subsidy. But it's not going to happen anyway as nuclear is not low carbon - the AGRs are cooled by carbon dioxide discharged into the atmosphere. The Commission's decision is being challenged by Austria. If that is also defeated, there will be a case for nuclear to be banned as an infringement of our right to life under the EU Human Rights Act.

    • Replies to Jo Brown>

      Comment by Richard Phillips posted on

      Factually erroneous, the CO2 is a circulated coolant, under a pressure, as I recall of about 80 psi, and is only lost to the atmosphere by leakage.

  2. Comment by P Craft posted on

    New build at Hinkley Point C is a long and very welcomed decision to boost our dwindling energy needs in this country, with thousands of new homes being built and the ever growing population it wouldn't have taken too long for power cuts to be introduced, this is very good news for our ageing nuclear industry.

  3. Comment by Martyn posted on

    1. The claim there is no subsidy is highly mendacious. The only taxpayers who will not be paying subsidies to EDF for the new Hinkley Point reactors are those who never use electricity.

    2. Approving CFDs as a subsidy mechanism for new renewables technologies that require support to come to maturity should not mean that subsidy for a 60 year old technology that has never managed to wean itself off subsidies - which is what nuclear is.

  4. Comment by Tilak Ginige posted on

    Nuclear power: ecologically sustainable or energy hot
    potato? A case study @
    We are facing the prospect of fossil fuels running out. The magnitude of the hydrocarbon resource gap and lack of alternative energy sources leaves us with few choices. The gap between supply and demand must be met through either increased efficiency or increased nuclear/renewable energy production. With the proposed development of ten nuclear power stations, government appears committed to using nuclear power to combat the problem. However, the sustainability of this solution is questionable. By taking Hinkley Point, Somerset as a case study, this paper will explore the sustainability of the project by having regard to the environmental impacts on marine biodiversity, as well as questioning the decommissioning and waste disposal costs that have been provided for the project. In doing so, this paper aims to understand whether nuclear energy is truly sustainable or simply a method of shifting the economic and environmental burden of responsibility onto future generations.

  5. Comment by Brian Catt CEng, CPhys, MBA posted on

    Very necessary. Clean, controllable 24/7 energy. BTW Fission product waste after fuel recycling is stored as radiocative rocks, inside naturally radiocative rock stores which will all be decayed by the time geological movements recycle it. Far safer than coal that puffs out a Chernobyl of Becquerels up the Chimney every 7 years per GW, for example. Who is making up the CO2 emissions nonsense? Apart from the fundamental error regarding closed circuit cooling does he understand preferring new wind farms to new CCGT gas or nuclear build to replace unscrubbed killer coal makes CO2 emissions far worse in joined up fact on the grid? Doubt it.

    BAD THING: This is a state level fiscal fraud in energy policy, again. Around £7B over priced if £16B is the capital cost number. Vastly price rigged when a quick review of the World Market deals and IEA analysis shows the true cost of Gen 3 Designs is £2.8B per GW, so 3.2 GW should cost around £9B at market rates. NOT £16B.

    Typically French Government/British Government/EC stitch up of the tax bill payer exploiting complex issues the public and media do not understand for easy lobbyist profit. Energy is one of the biggest and most pervasive government run frauds on the public on the technical and economic facts ever , outside War and Defence contracts. Waste treatment is the other.