Davey, Proglio and De Rivaz express positives at press conference

The UK energy secretary, Ed Davey, and his EDF counterparts, Group Chair Henri Proglio and EDF Energy CEO Vincent De Rivaz provided more detail on the deal to build at Hinkley Point at a press conference at Carlton House in London on Monday afternoon.

Mr Davey told the assembled media, “In a deal this size it is right to ask questions but we have got to make these investments because nearly two-thirds of our electricity-generating capacity is going offline over the next 15 years; we’ve got to replace eight out of nine of our nuclear power stations and almost all our coal power stations.”

Davey, Cameron, De Rivaz and Proglio
“40 per cent of our capacity, which is coal power and 20 per cent which is nuclear, must be taken off and no government has faced up to making that tough decision until now. This decision means safe, reliable, affordable, low carbon energy and a good deal for Britain.”

The secretary of state outlined that consumer bills would not be impacted until 2023, when the new nuclear reactors at Hinkley Point C are scheduled to commence delivering power, but added that by then it would be “a different energy world.”

The government, he said, was acting now to protect consumers in the future when it was likely that gas prices would have continued to escalate, while renewables could not possibly be developed at a realistic enough pace to make up for any energy shortfall.

“It would take 6000 wind turbines to produce the power that will come through Hinkley Point C” we cannot do that at the moment.”

“We have taken unprecedented steps to see that this deal is good for consumers. EDF (Euronext:à‚ EDF) have opened their books and it has enabled us to take this into account to see that customers get fair treatment.

“It’s very likely that energy price rises that we’ve seen over recent years ” such as for gas prices “will continue to go up. So if we rely on gas and existing sources, we will really be in trouble.

We must replace 60 per cent of our capacity within a short time, and that is not possible with just gas ” it’s too risky for consumers. Wholesale gas prices have gone up 50 per cent in the last five years, and we don’t want the economy to be reliant on gas as lots of it is imported.”

Mr Davey stated that the average household energy bill will be à‚£75 lower by 2030 by making the investment in nuclear, and in addition he said the government had ensure that the UK taxpayer was spared the risk associated with failure, as had happened in other countries.

“The construction risks don’t fall on the consumer so if costs overrun these will be taken up by EDF and co investors and not by the consumer.

The next step before final sign off on the historical agreement is for the European Commission to examine the deal and give its assent.

Earlier this month the Commission’s Joaquàƒ­n Almunia, the EU competition commissioner, ruled out including a reference to nuclear power in revised state aid rules, an indication the UK request could be difficult.

If that final hurdle is cleared it will provide a clear signal to enable finance and private sector investment in low carbon generation across the UK and continent in general.

Monday’s deal also includes a clause that would force any future British government to reimburse EDF for its investments if it decided to shut down the Hinkley Point project for reasons other than safety or security.

57 per cent of the value of the project is expected to be provided by UK firms and CEO De Rivaz said in a Q&A following the initial speeches that EDF are confident in the design of the reactor itself and will be drawing on successful experience garnered from other projects in the country, namely the development of London Olympic Park, and Heathrow Terminal Five.

He pointed out that his company had learned from previous projects and that the Flamanville project in France was being delivered on time and within cost.

De Rivaz added that value for customers was a priority, in agreeing the eventual strike price.

“As the largest supplier and generator of electricity in Britain, we stand on the side of the customers in striking this deal, which is fair and balanced for EDF, the UK and the customers. Today is a step but we are conscious of what remains to be done.

“Nuclear is one of the long terms consistent guarantees that the UK will have the low carbon electricity it needs that is at a price that is fair to consumers.

“We are convinced more that more certainty, visibility and security all help to stop bills going up. This is against the volatility associated with fossil fuels and in the long term this project will help grant stability for investors and fair prices for consumers.”

Paying tribute to the ‘patience, persistence drive and determination’ of all those behind bringing the deal to fruition Henri Proglio said, “It is a historic day for EDF for what will be our first nuclear power plant in the UK in our most important market outside France. The most striking impact over the last few years is the realism of the approach to energy policy here. There is always consideration of the facts and I want to congratulate the UK government and secretary of state for having the debate.”

Mr Proglio also revealed that the projects’ Chinese partners would have a “minor role as shareholders, the same as any other shareholders. We will control the industrial aspect of this project.”

For more nuclear power generation news

For more news on the deal between EDF and the UK government

For more Hinkley Point agreement reaction

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