Another U-Turn? Govt May Guarantee Nuclear Industry Subsidies For 40 Years
The government is offering guaranteed subsidies for up to 40 years to electricity companies in a last-ditch effort to get them to build new nuclear power stations, it has been reported.
The Coalition had promised to only build new power plants without subsidy but the pledge has led to private firms pulling out as costs of reactors rocket.
Now it is claimed that the government is planning to guarantee contracts until 2050 with possible subsidies on top to maintain a minimum price paid for power.
The long term contracts are designed to share the initial costs of building the reactors over the life time of the plant and to keep the cost of energy below £100 per megawatt during its lifetime.
That figure is still twice the current market price, but ministers believe that subsequent plants would become cheaper and more competitive.
Whitehall sources told the Guardian that they were confident that although the cost of the new reactor would be very high, that will start to fall with subsequent projects, and could fall as low as £55-56 a unit later in the programme.