Ministers respond to warnings that UK is on brink of power blackouts
with support for French generator EDF to build Hinkley Point nuclear
power plant.
The government has responded to warnings that Britain is on the brink
of power blackouts by announcing £10bn in financial guarantees to the nuclear power industry – a concession aimed at paving the way for the building of the first new reactor in the country for a generation.
The
support for French generator EDF, which is in negotiations to build the
Hinkley Point nuclear power station, was announced by the Treasury
chief secretary, Danny Alexander,
as the centrepiece of a £100bn package of infrastructure investment
covering 2015-20, including new roads, schools and affordable homes.
Michael Fallon, the energy
minister, insisted the substantial guarantees represented a commercial
loan, not a subsidy, saying: "This is big-scale financing, not available
in the markets." He added that similar government guarantees had been
offered to Drax power station to convert from coal to biomass.
EDF
had already prepared the site next to the two existing stations, but
would not commit to the project unless the government guaranteed a
minimum price for the electricity the new reactor would produce.
The
news came as Ofgem, the energy regulator, said the statistical
probability of major power shortages in the UK would increase to about
once in 12 years in 2015, from once in 47 years now, as a result of
closing power plants. About a fifth of Britain's power generation
capacity is scheduled to close in the next decade, including all but one
nuclear plant.
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