Government ‘Prepared To Walk Away’ From Nuclear Energy Talks
Britain is prepared to walk away from talks with French giant EDF Energy over its planned UK nuclear plant if the burden for the consumer is too high, said John Hayes, the energy minister.
EDF, majority-owned by the French state, is negotiating with the UK Government over a guaranteed price for electricity from the plant at Hinkley Point in Somerset, which would leave consumers liable for “top up” subsidies.
Mr Hayes on Tuesday told a select committee hearing that the Government has a bottom line it will not abandon, after MPs asked if the Coalition is prepared to say “that’s too much for the consumer”.
“Absolutely,” he said. “There’s absolutely no doubt – and as I looked into the eyes of [EDF Energy chief executive] Vincent de Rivaz yesterday, I told him that the Government will always put the national interest first.
“And where the national interest coincides with commercial interests – and I think it generally does – that is great for both of us. But of course in any commercial arrangement … both sides need to be able to walk away from the deal. As soon as that is not the case, it becomes a rather unhealthy arrangement.”
Mr Hayes also promised that the Government would be “as transparent as possible” over any terms reached for the plant, which would be the first built in the country since the 1980s. A “’smoke-filled-room deal’ would not be what we would seek,” he said.
His comments came amid rising concerns about the impact of new nuclear plants on consumer bills.
Under the model proposed, if the market price for electricity is below the level agreed with EDF, all UK energy consumers will be liable for subsidies to “top up” the difference.
Mr de Rivaz last month told the select committee that the proposed contracts for difference (CfD) to guarantee the electricity price were the best way to incentivise the investment at Hinkley Point, estimated to cost £10bn to £14bn.
However Phillip Lee, a Tory MP, has argued that the model looked like it was “structured to pay an annuity to the French taxpayer for the next 40 years”.
Yesterday’s hearing also saw Mr Hayes offer reassurances on the progress of the Energy Bill, which is intended to bring forward investment in new power plants and had been due to be published this month.
Tensions are growing within the Coalition over Britain’s energy agenda, with Mr Hayes last month calling for an end to wind farms “peppered” all over the countryside.
“Yes there are matters to be confirmed,” said Mr Hayes. “But in essence, in substance, there is certainly no change on direction. The fundamental importance … to create the certainty necessary for investment remains unabated.”