The financials at Hinkley
Today, French energy expert Bernard Chabot takes a look at the available financial framework data for the two new reactors to be built at Hinkley Point. He finds the state loan guarantee played a crucial role in the agreement on the strike price.
When an official strike price (a feed-in tariff) was proposed for a new nuclear plant in the UK a few weeks ago, my colleague Thomas Gerke and I published an article comparing the price of this future nuclear power to current solar and wind – an unfair comparison in a way because solar and wind will become cheaper over the next decade.
In March, our guest author Bernard Chabot analyzed (PDF) the situation in the UK to see what the strike price would have to be without a governmental loan guarantee. Now, it seems that the British government will be guaranteeing 65 percent of the loan, and China will also be investing.
Today, (PDF) Chabot takes a hard financial look at the basic information available and finds that the new strike price was only possible because of the loan guarantees. His original estimation of the cost of new nuclear was more than £0.10 per kilowatt-hour, not the £0.925 announced. In other words, the actual cost of this nuclear power is even higher than the strike price. (Craig Morris)