EDF reaches agreement on Hinkley Point C nuclear project (UK)

EDF and the British Government have reached in principle an agreement on the key commercial terms for an investment contract of the planned 1,600 MWHinkley Point C nuclear power plant. EDF Group has plans for two EPR reactors at Hinkley Point C in Somerset. In addition it is also developing proposals for two EPR reactors at Sizewell C in Suffolk.

Under the terms of the agreement, Hinkley Point C will offer stable and predictable prices through a “Contract for Difference”. If wholesale prices rise above an agreed “strike price”, consumers will not pay extra. If they fall below this price the generator will receive a top-up payment. Customers pay nothing until the power station is operational. The Strike Price is set at £89.5/MWh (€105.75/MWh) if Sizewell C goes ahead. There will be a payment from Sizewell C to Hinkley Point C equivalent to £3/MWh (€3.55/MWh) upon the final investment decision being taken with respect to Sizewell C reflecting the fact that the first of a kind costs of EPR reactors are shared across the Hinkley Point C and Sizewell C sites. The strike price will be £92.5/MWh (€109.30/MWh) for HPC project if Sizewell C does not go ahead. The payment mechanism funded by the Sizewell C project is intended to ensure that there is no impact on Hinkley Point C economics if Sizewell C goes ahead.

Hinkley Point C will be developed by EDF with a 45-50% share, in partnership with Areva (10%), China General Nuclear Corporation (CGN) 

and China National Nuclear Corporation (CNNC) (cumulated stake of 30-40%). Discussions are also taking place with a shortlist of other interested parties who could take up to 15%.

Subject to a final investment decision by July 2014, the power station is expected to complete commissioning of the first unit in 2023.