International Business Times, March 8, 2016 02:38 GMT
By Brendan Cole
British taxpayers could be wasting more than £17bn if plans for a French-led nuclear power plant at Hinkley Point go ahead, with one expert dubbing it the "worst deal I have ever seen."
EDF’s plans to built the plant in Bridgwater, Somerset were hit by the resignation of the company’s chief financial officer Thomas Piquemal, over concerns that it could push the company to financial ruin.
Analysts have raised doubts over the £18bn price tag of the French-Chinese deal which would see EDF being paid a guaranteed electricity price of £92.50 per megawatt hour price for 35 years. This is three times the present wholesale price of £33 per megawatt hour and will be indexed to inflation.
EDF Energy, largely owned by the French state, would pay for two thirds of the £18bn, with £6bn coming from China General Nuclear Power Corporation. But the British taxpayer will take most of the financial burden afterwards through artificially high energy prices.
Dominic Whittome, energy consultant at Mainline Energy told The Times: "The subsidies just look staggering. The government just didn’t know what they were doing...It’s the worst deal I’ve ever seen."
He is among industry experts who have suggested using cheaper technology, developed by Hitachi, which is in operation and is quicker to build rather than the French plans which involve a reactor with unproven technology.
The Hitachi design would still require subsidies, but only to the tune of £70 per megawatt hour, which would save Britain around £500m a year or £17bn over 35 years.
Mycle Schneider, a French nuclear consultant, told The Times that the departure of Piquemal, which comes hot on the heels of the exit of project director Christopher Bakken, was a "very substantial indicator that this project is not sustainable".
Piquemal has made no public comment about his departure, but a source close to him told the Financial Times: "He could not in good conscience remain at the company when it was pursuing a strategy [of Hinkley Point C] that put the entire company at risk."
Another board member told the FT that many directors are concerned about the project over which the company "risked everything".
However EDF’s CEO Jean-Bernard Lévy, is determined to push ahead with Hinkley, and has the backing of the French and UK governments which consider it a key plank of the countries’ relationship.
A final investment decision by EDF’s board on the project could come as early as April.