On Monday, the British government announced a deal with EDF that paves the way for the country's first privately financed Generation III reactors.
EDF has agreed to build two EPR units at Hinkley Point C in return for a guaranteed price for the next 35 years of $149.34 per megawatt hour, indexed to inflation. That price could fall to $144.50 if EDF completes additional units at Sizewell. Other investors include China General Nuclear Corp. and China National Nuclear Corp., which together will own 30 to 40 percent of Hinkley Point C, as well as Areva, which will hold a 10 percent stake, and an unnamed group of other potential investors, according to an EDF release.
The company will make a final investment decision on the $26 billion project by July of next year, pending approval of the deal from the European Commission. In addition to Areva, which designed the 1,600 megawatt EPR, contractors will include Bouygues TP/Laing O’Rourke, Alstom and Costain. The first unit is scheduled to come online in 2023.
"This deal means £16 billion 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," Prime Minister David Cameron said in a written statement.
While the BBC noted that the deal's strike price is more than double the current price of wholesale electricity in the UK, EDF maintains that the plant will be competitive with natural gas and renewables when the reactors come online in the late 2020s. Customers will not begin to pay for the units until they are operational.