4 December 2012

Centrica Out? The Twists and Turns of UK Nuclear New Build

Press reports have appeared again, on 2 December 2012, which suggest that Centrica is likely to withdraw in the New Year from its involvement with Électricité de France (EDF), in the construction of nuclear power in the UK. This comes days after EDF was granted the first nuclear site license, for the Hinkley Point C project. It is further suggested that Centrica will write off the £200 million investment it has spent on the projects so far. Earlier in the week the Government published its long awaited Energy Bill, which sets a new investment framework for the electricity market. A key part for the nuclear industry will be the contracts-for-difference (CfD) which introduces a guarantee – or strike price - for nuclear produced electricity. Newspapers have suggested that strike price for nuclear will be up to £165/MWh , which is around treble the current market price. The details of the CfD were not included in the Energy Bill and will only be published in mid-2013, although a separate negotiation between EDF and the Government on Hinkley Point C is expected to conclude earlier.