Utilities giant EDF has stated in a letter to its staff that it is "confident" that the controversial Hinkley Point nuclear power plant will be given the go ahead, despite questions being raised about its funding and the level of its electricity generation price. In a letter sent to EDF staff, the company's chief executive Jean-Bernard Lévy admitted that the energy company would need to secure extra funding from the French government.
In his statement, Lévy said: "We are currently negotiating with the French state to obtain commitments allowing us to secure our financial position. I am sure that this project is a good project for the group and that in the near future, all the conditions will come together for it to be definitely launched. It is clear that I will not engage EDF in this project before these conditions are met."
The Somerset-based project will form the first nuclear power station built in the UK for 20 years. It is a joint venture between EDF and the China General Nuclear Power Corporation, which will own 33.5% of the project and is investing an estimated €8bn (£6bn). Construction of Hinkley Point C is due to begin in 2019, but is expected to be dogged with delays and red tape.
The Strike Price deal
Hinkley Point C is designed to be a 3,260 MW power station, capable of supplying 7% of the UK's current energy needs.
When planning permission for the power station was first sought, the wholesale price of electricity was £40/MWh. Now it has risen to more than £90/MWh.
The UK government's deal with EDF also states that the £92.50/MWh strike price will rise with inflation for the next 45 years.
A Department of Energy and Climate Change spokesman said: "[Nuclear] is the only proven low-carbon technology that can provide continuous power, irrespective of whether the wind is blowing and the sun is shining, and the industry will create thousands of jobs and benefit companies in the supply chain, meaning financial security for working people and their families across the UK."
The UK government says the scheme will create 25,000 jobs and slash Britain's carbon emissions, but opponents have objected to it on economic and safety grounds. The government has also heavily criticised for making deal that includes a guaranteed minimum payment to EDF for each unit of electricity generated – a strike price – of £92.50 per megawatt hour of power generated. around £311,330 per hour. Many critics have described this minimum payment as a taxpayer-funded subsidy, as the strike price could cost up to £311,330 per hour.
Earlier this week EDF's finance director Thomas Piquemal resigned after raising concerns that the project could jeopardise the company's balance sheet.