Osborne offers £2bn in guarantees to Hinkley power station development

21 Sep 15

The Treasury is to provide a £2bn guarantee to help fund the planned Hinkely Point C nuclear power station.

Chancellor George Osborne said that the guarantee, provided by Infrastructure UK, would pave the way for the final investment decision by EDF, supported by China General Nuclear Corporation and China National Nuclear Corporation, later this year. Further guarantees could also be available in the longer-term.

The cost of the plant, which EDF said would supply 7% of the country’s electricity needs, is estimated at around £25bn. It is also expected to open the door to more collaboration between the UK and China to construct new nuclear power stations.

Announcing the loan guarantee in a visit to China, Osborne said new nuclear power stations were essential to meet energy demands in the UK, and the country needed to replace around quarter of its generating capacity in the next ten years.
“Nuclear power is cost competitive with other low carbon technology and is a crucial part of our energy mix, along with new sources of power such as shale gas,” he said.

Energy secretary Amber Rudd added the government would continue to work with EDF to finalise the deal, while EDF Energy chief executive Vincent de Rivaz said it was a clear sign of the government’s commitment to Hinkely Point C.

“It is further progress towards a final investment decision on a project which will provide reliable, affordable low carbon electricity for decades,” he said.

The European Commission approved state aid plan for the project last October, and further amounts will be available if EDF meet certain conditions, and subject to fuller government approvals.

The government said that the construction and operation of Hinkley Point C would create thousands of jobs in Somerset and in the nuclear industry across the UK, as well as boosting energy security.

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