PM Cheers Somerset Nuclear Power Plant Deal

The Prime Minister has hailed a landmark deal to build Britain's first new nuclear plant in a generation.

The agreement with French-owned EDF Energy will see Hinkley Point C, in Somerset, begin operating in 2023.

David Cameron said: "As part of our plan to help Britain succeed, after months of negotiation, today we have a deal for the first nuclear power station in a generation to be built in Britain.

"This deal means £16bn of investment coming into the country and the creation of 25,000 jobs, which is brilliant news for the South West and for the country as a whole.

The 'strike price' gives EDF a guaranteed rate for producing electricity

"As we compete in the tough global race, this underlines the confidence there is in Britain and makes clear that we are very much open for business."

The Government has been negotiating with French-owned EDF Energy for more than a year over two new plants.

But ministers are likely to face criticism over the £92.50 per megawatt hour that will be paid for electricity produced at the Somerset site - around double the current market rate.

The so-called 'strike price' could fall by £3 if another mooted development at Sizewell goes ahead, allowing for efficiencies in development and testing.

Ed Miliband and George Osborne weighed into the energy debate last week

The contract is due to run for 35 years, with the electric price increasing annually in line with CPI inflation. At full capacity the two reactors could provide up to 7% of the country's energy needs.

It is understood that China General Nuclear Power Group and China National Nuclear Corporation will be investing in the estimated £14bn scheme.

One of the last stumbling blocks to a deal was removed last week when Chancellor George Osborne announced that Chinese firms would be allowed to invest in civil nuclear projects in the UK - even potentially taking a majority stake.

Energy Secretary Ed Davey insisted he had secured "good value" following more than a year of intense negotiations.

The project will cut the UK's carbon emissions by 9 million tonnes a year, and create thousands of jobs.

"We think it would be good value if (the strike price) was a little higher," the Liberal Democrat Cabinet minister said.

Anti-nuclear campaigner, Theo Simon

"I was determined to get them below £90 so I could prove to everybody we had got a good deal...

"What has driven a tougher deal is the fact that I made clear we could walk away from the table. We had other nuclear options."

Energy policy has shot up the agenda since the party conference season, when Labour leader Ed Miliband pledged to freeze retail prices for 20 months.

The funding agreement will almost certainly mean that the new reactor at Hinkley will be a mirror image of the Taishan plant in China.

During a visit to the Taishan plant last week, Mr Osborne said: "It is an important potential part of the Government's plan for developing the next generation of nuclear power in Britain.

"It means the potential of more investment and jobs in Britain, and lower long-term energy costs for consumers".

But anti-nuclear activists living near the site say they have been misled by the decision process to site the plant at Hinkley.

Campaigner Theo Simon told Sky News: "We were told it would mean lower energy bills, but actually the announcement of the strike price is really the last nail in the coffin of this project.

The Chancellor visited a Chinese nuclear power plant last week

"We were told that it would provide cheap energy; we were told it would help us to bridge the energy gap in the early 2000s, and now it seems it won't be built (until) 2025 and we will all be paying for the profits of EDF and Chinese nuclear corporations for the next 40 years."

The issue of prices has become even more controversial with the Big Six power firms unveiling hikes of more than 9% in electricity and gas prices.

Deputy Prime Minister Nick Clegg has raised concerns about the increases, telling Sky News' Murnaghan programme that the energy firms needed to justify prices increases.

"Clearly the companies need to justify the bill increases that they are now announcing," he said.

"It cannot be right that people who are really struggling - many, many people still struggling to pay their weekly, their monthly bills, where electricity and gas bills for this winter are a looming worry.

"It can't be right that those bills are increased for those households in our country and yet it is all rather opaque about what drives these increases."

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