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Back-up plan needed for new nuclear, say MPs

The government needs a “back-up plan” to meet climate change targets if new nuclear power stations are not built on time, MPs said today.

The Commons Energy and Climate Change Committee said in its new report Building New Nuclear: The Challenges Ahead the government needed to develop an energy back-up strategy.

“If new nuclear power stations are not built on time, our legally-binding climate change targets will be extremely challenging and much more expensive to meet,” said committee chair Tim Yeo.

“The Government seems to be crossing its fingers that private companies will deliver a fleet of new nuclear power stations on time and on budget. Ministers need to urgently come up with a contingency plan in case the nuclear industry does not deliver the new power stations we need.”

Industry has outlined plans to build 16GW new nuclear power stations by 2025 with energy firm EdF’s plans for Hinkley Point C in Somerset most advanced.

But EdF’s two other European projects in Olkiluoto in Finland and Flamanville in France have experienced serious delays and cost overruns, said the MPs.

The committee also said it supports the use of contracts for difference - which guarantees the fixed for electricity - to help finance construction of new nuclear but is concerned over the lack of transparency between government and industry.

“Unlike gas-fired power stations, nuclear power stations are expensive to build but cheap to operate. It is right that investors should be given confidence that they will recoup their money by providing them with long-term contracts,” said Yeo.

But Yeo added that the new contracts must provide value for money for the consumer and should not be offered at a price that is higher than other low-carbon sources of energy, such as offshore wind, which is targeted to be around £100 per MWh by 2020.

Reaction

Energy minister John Hayes said the government is “determined” to see new nuclear play a role in the future energy mix.

“We’re focused on bringing forward this investment, but also getting the best deal for the consumer,” said Hayes.

“There will be transparency over the terms of any investment contracts, offered to developers of low carbon electricity generation, including new nuclear developers – and details will be laid before Parliament.”

Energy firm EdF said today’s report makes clear that new nuclear power stations are essential if the UK is to meet is climate change targets in the most cost-effective way.

The firm added its project at Hinkley Point C is “ready for delivery” with stable and approved design with known costs.

It added the lessons learnt from construction at Flamanville in France are incorporated into the costs estimates given to the UK government.

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