The new chancellor of the exchequer has expressed his determination to see construction begin on the controversial Hinkley Point C nuclear plant, amid mounting concerns over the cost of the project.
“We have to make sure the project goes ahead,” Philip Hammond told BBC’s Today programme. However, he admitted there was “obviously an atmosphere of uncertainty” around the £18bn scheme due to the change of ministers following the referendum.
Talks with France and China – the two countries offering to build the Somerset reactors – were already underway to reassure them that the UK government continued to fully back Britain’s first new nuclear power plant in a generation, said Hammond.
A modern economy needed a fully modern and functioning power and supply system, said the chancellor who said he believed Hinkley was a “prerequisite” for this to happen.
Hammond admitted he was not aware of the latest findings from the financial watchdog, the National Audit Office, that consumers may have to pay out nearly £30bn over the 35-year life of the plant – through higher energy bills – if the cost of wholesale energy remained low. He said he would look at this immediately.
A subsidy deal signed between the French energy company EDF and the administration of David Cameron, meant that EDF could receive compensation – effectively paid by consumers’ higher bills – in the event of a fall in wholesale electricity prices.
Hammond said Hinkley would make a huge contribution providing over 6% of the UK’s power.
Hammond’s intervention is a significant move amid speculation that the project could be abandoned.
The future of the facility is in the hands of EDF and the French government. Both parties have repeatedly delayed taking a financial decision on the scheme amid mounting debt problems at the partly state-owned energy group. EDF and the Elysée have promised that a final investment decision will be taken in September.
