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ENC 2012: Market Reform ‘Essential For UK New Build’

By David Dalton
10 December 2012

10 Dec (NucNet): A final investment decision on whether or not to build new nuclear reactors at Hinkley Point in England will be taken in 2013, but only if key elements of the UK’s energy bill are passed, EDF Energy chief executive officer Vincent de Rivaz said today.

In a speech to the European Nuclear Conference in Manchester, England, Mr de Rivaz said reforms to the UK’s electricity market including the introduction of “contracts for difference” (CfDs) are essential for EDF Energy to be able to make a long-term commitment to building two European Pressurised Water Reactors (EPRs) at Hinkley Point C.

The government and power companies say CfDs will stabilise revenues for investors in low-carbon electricity generation projects such as nuclear, helping developers secure the large upfront capital costs for low carbon infrastructure while protecting consumers from rising energy bills.

CfDs will stabilise returns for generators at a fixed level known as a “strike price” and insulate consumers by clawing back money from generators if the market price is higher than the strike price.

EDF Energy was expected to take a final decision on Hinkley Point C by the end of this year, but this will now be 2013, Mr de Rivaz confirmed.

EDF Energy received a site licence for Hinkley Point C in November 2012, the first for a new nuclear plant in 25 years. However, the licence does not provide full permission for the construction of the power station and the company will need further consent from the ONR to start nuclear related construction.

Mr de Rivaz said EDF Energy is still hoping to have “all the components” for Hinkley Point C in place before the end of the year, including approval of the reactor design and a recommendation from the planning inspectorate to the Secretary of State on whether the project can proceed.

He said the company needed to regain public confidence in the EPR following delays and cost overruns at other EPRs being built at Flamanville in France and Olkiluoto in Finland.

He said “all the lessons had been learned” and any reactors built at Hinkley Point would not be affected in the same way. He pointed out that there were no delays or cost overruns at two other EPR-type reactors being built at Taishan in China.

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