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UK Government In Nuclear Poker Over £20 Billion Subsidies

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Emily Gosden, The Daily Telegraph

Britain’s hopes of a new generation of nuclear power plants face fresh doubts after Hitachi suggested its £20bn reactor investment plans could be affected if knife-edge negotiations over a rival project collapse.

The Government is in talks with French power giant EDF over building Britain’s first nuclear plant in a generation at Hinkley Point in Somerset.

But a deadlock over the level of subsidies for the project could see the negotiations collapse within weeks.

EDF has warned its staff the talks are at a “critical stage” and “very challenging”, it emerged on Wednesday.

At the same time, Hitachi warned its own nuclear power plans in the UK could be affected by the outcome of the EDF deal, suggesting its confidence in Government policy will be undermined if ministers and the French cannot agree.

Industry sources say ministers would have to go back to the drawing board to restore investor confidence if the EDF talks fail.

Hitachi boosted Britain’s nuclear ambitions last year when it bought Horizon, a venture to build reactors on Anglesey and in Gloucestershire, for £700m.

The Japanese company said it planned to build at least four reactors, with the deal hailed by the Prime Minister as a “decades-long, multi-billion pound vote of confidence in the UK”.

Under the Government’s Electricity Market Reform (EMR) plans, nuclear developers will be given “contracts for difference” guaranteeing a “strike price” for the electricity their plants will generate.

However, the Treasury remains in dispute with EDF over that price.

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