Fleet Financing

Hinkley Point C nuclear power station could help households save £1billion a year on energy bills, EDF says

French energy giant EDF says its Somerset nuclear power station could save UK consumers more than £1billion on energy bills this year alone if it was already operational.

The company, which is building Hinkley Point C near Bridgwater, has spoken out following comments from the Business Secretary on Friday (May 13) about the cost of plans to build new nuclear power stations in the UK.

Kwasi Kwarteng has told households to prepare for a “small increase” in energy bills under government proposals to fund a new fleet of reactors across the country.

But EDF said that although there are upfront costs when the plants are built, nuclear power could save consumers “much more” on energy bills over its lifetime.

“Nuclear power is zero carbon and will play a vital role in preventing any future energy crisis,” an EDF spokesperson said. “If Hinkley Point C was online today, consumers would have saved over £1 billion on their energy bills in 2022 alone.”

The government’s energy strategy was published in April and has a fleet of new nuclear plants at its heart, with the prime minister suggesting a new reactor could be built every year.

It is hoped that the government’s funding model, announced in October, will attract a wider range of private investment into new nuclear power projects in the UK. The Nuclear Energy (Funding) Bill will use a model known as a Regulated Asset Base (RAB) to fund future nuclear power stations in Britain – a method which has funded infrastructure projects such as Thames Tideway Tunnel and Heathrow Terminal 5.

According to the Business Department, the RAB model will reduce the UK’s reliance on overseas developers for funding new nuclear projects by widening the pool of private investors to include UK pension funds, insurers and other institutional investors.

But a large-scale project funded under the scheme will add a cost to UK households at a time when rising inflation is putting pressure on consumers.

The government said the cost would be “at most a few pounds a year” for typical household energy bills during the early stages of construction and on average less than £1 a month throughout the construction phase of the project .

It also claims that funding the project could result in consumer savings of at least £30bn on each project – translating to more than £10 a year for an average household dual fuel bill throughout. throughout the life of the nuclear power plant – which can operate for 60 years.

Hinkley Point C is one of the biggest construction projects in Europe and when completed it is hoped the plant will be able to produce low-carbon electricity for six million homes over 60 years.

Last September marked five years since the start of full construction, although EDF said that in 2021 the start of power generation at the plant would be postponed six months to June 2026 and previous cost estimates of £21.5-22.5 billion have been revised to £22-23 billion.

In January, Mr Kwarteng said Hinkley Point C would help shield the UK from ‘volatile’ wholesale gas prices during a visit to the power station. He praised the progress made during the construction of the plant as he and Treasury Exchequer Secretary Helen Whately toured the site.

Earlier this month, the UK’s independent nuclear regulator issued an improvement notice to Hinkley Point C after a worker fell from scaffolding at the plant. The worker avoided serious injury when he fell approximately five meters on March 4.

The Office of Nuclear Regulation (ONR) passed the notices to the project’s main civil engineering contractor, Bylor, a joint venture of construction companies Laing O’Rourke and its French counterpart Bouygues Travaux Publics.

Hinkley Point C said at the time that he accepted the regulator’s findings and had ensured the shortcomings identified were corrected to avoid a repeat incident.