Government inertia is stalling plans to sign a long term agreement for electricity price which will enable construction of new nuclear power station Hinkley Point C to go ahead.
A source close to the negotiations said energy firm EdF’s failure to agree a long term fixed price for electricity with the government was down to the lengthy decision making process and not to a major difference over the level of subsidy.
“Both are close on price but the reason for stalling lies with the government,” said the source.
“It [the electricity price agreement] is a big thing for the government as it’s the first one. The government is nervous and it must be signed off at a number of levels.” The source said while both parties are close to agreement on price - with a strike price reported between £95 - £99 per MWh - the length of the contract has not been decided.
The Energy Bill - which authorises the use of a contracts for difference - had its second reading in Parliament last week.