It has been reported that UK electricity users could be asked to pay up-front for a new nuclear power plant that has been suggested by EDF at Sizewell in Suffolk. Currently, the projected construction costs are in the region of £20b.
Although wholesale generational costs for electricity now only represent just over 40% of the consumer’s bill we have seen overall electricity costs increase rapidly through 2018 and 2019 so any further increase in costs are likely to be met with resistance.
The current increase is around £6 (1.2% on a £500 electricity bill) but what would also need to be strongly considered is the face that large projects such as this can over-run initial budgets – who will pick up any shortfall?
The Treasury has encountered a lot of criticism for the current EDF build at Hinkley Point (Somerset) due to the guaranteed minimum strike price of £92.50/MWh – this being currently twice what the wholesale rates are. In addition this price is indexed to inflation, meaning the final cost to the consumer could be much greater.