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.