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Billions of pounds in subsidies to help build 10 new reactors will inflate household energy costs: Britain’s householders face increases in their power bills of about £200 a year to pay for a new generation of nuclear reactors under a deal being negotiated between Ed Davey, the energy secretary, and EDF, the French state-owned power company.

The talks have been under way for weeks, even though the energy bill, under which EDF would receive billions of pounds in levies on British consumers, has yet to be published. A draft will be released on Tuesday.

In an interview with The Sunday Times, the Liberal Democrat Davey confirmed that talks were advanced and that their purpose was to enable EDF to start work on its first two new reactors, at Hinkley Point in Somerset, before the bill was even approved, confident in the prospect of healthy profits.

The long-term aim, however, is for Hinkley Point to be the first in a string of new nuclear power stations that will become the backbone of Britain’s power system.

The attraction of nuclear power, said Davey, was that it offered secure long-term power without reliance on imported gas or coal and with no emissions of CO2.

“The need to get energy security and decarbonisation of our power supply is so important that we need a system that can work for all low-carbon technologies,” he said.

“New nuclear is one of the low-carbon technologies available to us along with various forms of renewable energy and carbon capture and storage. Given the threat of dangerous climate change we need to consider all forms of low-carbon power generation.”

Davey’s comments follow weeks of speculation over the future of nuclear energy, driven by factors such as the the collapse of the Horizon consortium, which was backed by the German utility giants Eon and RWE. They said nuclear power stations were simply too expensive to build and took too long to generate a return.

More recently, EDF’s own plans have been called into doubt as the predicted costs of Hinkley Point and other stations rose from £9 billion each to £14 billion. Some experts have suggested that the consumer levies needed to make the plant viable will simply be too high.

Peter Atherton, head of European utility sector research at Citigroup Global Markets, calculates that the proposed 10 new plants would cost each household an extra £200 a year on average power bills. Since the average bill is around £400-£500 a year, this would be a huge increase.

Are such figures correct? Vincent de Rivaz, the chief executive of EDF Energy, the French giant’s UK subsidiary, declined to comment on the negotiations. However, he did confirm that the nuclear power generated by the Hinkley Point plant would cost more than double — perhaps triple — the current wholesale price, “although still less than the cost of offshore wind”.

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