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UK Government Awards Planning Permission for Hinkley C and Launches its Long Term Strategy for Nuclear Power

Tuesday 26 March 2013

In the UK on 19 March 2013 the Government granted planning consent for the construction of two EPR reactors at the Hinkley C nuclear power plant. The project has now been given the majority of approval that is required to begin construction. However, despite the announcement, it is far from clear when or if the project will proceed. In particular, the negotiations between the Government and EDF on the guaranteed price of electricity (the strike price) have yet to be concluded. Although the Department of Energy & Climate Change (DECC) have refused to comment, the press have suggested that the strike price for nuclear power will be in the order of £100/MWh—double the current market price—that it will be fixed for forty years and that EDF is looking for a 10% rate of return on its investment. Even if an agreement is made, it will still have to receive State Aid approval by the European Commission. As part of its nuclear promotion the UK Government then published on 26 March 2013 a long-term partnership to outline its support for nuclear development at home and abroad. While documenting the current programs the document notes that “the future of nuclear power will depend on it being able to compete effectively against other forms of low carbon electricity generation”.

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