The UK will build its first nuclear power station in 25 years, as it strikes a deal with French EDF and two Chinese backers.
The government’s year-long negotiations with French company EDF came to fruition on Monday when it announced the building of a new nuclear power station, Hinkley point C in Somerset, where construction will start in 2014.
The £16bn nuclear station will provide 7 per cent of the UK’s electricity when completed in 2023.
It will also create around 25,000 jobs during construction of the power plant as well as 900 permanent jobs during its 60-year operation.
The two reactors proposed for Hinkley are a key part of the coalition’s drive to shift the UK away from fossil fuels towards low-carbon power
Two Chinese state-owned companies are expected to acquire stakes in the Hinkley project along with French developer Areva.
The cost per megawatt of energy to be produced at the plant will be higher than it is currently. The government has offered EDF guaranteed prices (£92.50 per megawatt hour will be paid for electricity produced at the Somerset site, around double the current market rate).
The high price reflects the cost of setting up and then decommissioning the power station. But if a new power plant is set up by EDF in Suffolk it will bring the price down to £89.50/Mwh.
The last nuclear power plant in Britain was Sizewell B, which started construction in 1988.
Prime Minister Mr Cameron said: “This deal means £16 billion of investment coming into the country and the creation of 25,000 jobs, which is brilliant news for the South West and for the country as a whole.
“As we compete in the tough global race, this underlines the confidence there is in Britain and makes clear that we are very much open for business.
“This also marks the next generation of nuclear power in Britain, which has an important part to play in contributing to our future energy needs and our longer term security of supply”.
The news comes as a third British energy company raises its prices this autumn. Npower announced this morning it would raise the price on a dual-fuel bill by 10.4 per cent, a hike even higher than the 8.2 per cent rise from SSE and the 9.2 per cent increase from British Gas.
The rising bills have put energy on the popular political agenda, with Labour leader Ed Miliband putting rising bills on his election agenda.