The boss of energy giant EDF has demanded taxpayer subsidies for nuclear power to lock in prices almost three times the current level. The French-owned company is preparing to build a raft of reactors across the UK. But before it commits to the £14billion project, the group wants guarantees from the government over the price it can charge for each unit of electricity produced.
Booming costs: EDF wants up to £140 per MW-hour – an amount almost three times higher than the current electricity market price
It wants to ensure it can claw back the money it will pump into the construction of the plants, with the state making up the shortfall if the wholesale electricity price declines.
Executives at the energy group want to have nailed down a price before the end of year so they can convince investors to give the project the green light.
EDF chief executive Vincent de Rivaz yesterday said the price demanded by EDF would be no higher than £140 per MegaWatt hour (MW hour).
The amount is almost three times higher than the current electricity market price of £50 per MW hour.
The average family uses around four MW hours a year.
It also makes nuclear power as costly as offshore wind – the most expensive of the renewable technologies. Supporters of the energy source say that, unlike wind power, nuclear energy is reliable.
But in 2008, de Rivaz told investors that the price demanded would be around £45 per MW hour.
‘A lot of things have changed: four years, inflation, cost of commodities, steel, concrete,’ he said yesterday.
He added the figures were based on the group’s Flameville reactor in France, a project that has become a byword for escalating nuclear costs after its budget doubled to £4.7billion. It is also running four years behind schedule.
UK government estimates produced last year said the real cost of producing nuclear power is between £80 and £100 per MW hour.
But de Rivaz refused to say whether the company would accept that price.
Some analysts think the economic impact of its decision will give EDF the upper hand in talks with ministers.
Its investment in nuclear construction will create thousands of jobs and bring millions of pounds into the UK economy.
The Government also needs the nuclear reactors to be built in order to plug the ever-increasing energy gap created by closing down existing generators around the country.