Energy Minister Greg Clark has indicated that any more new nuclear power stations will have to come at a strike price lower than Hinkley C at £92.50 inflation proofed for 35 years from 2012 (as we understand this amazing formula). £80 was indicated, this being about a sixth lower, but still £30 above the relatively stable wholesale price on the electricity market run by the National Grid. No clarity about how Sizewell might fair here, but the EU Commission said it should be £89.50. A reduction to £80 might look big, but there are other factors at play. The Government has ended its renewables support scheme of ROCS ( renewable obligations certificates) which excluded nuclear which also pays the Climate Change Levy. The post ROCs scheme is, in fact, the strike price regime which now counts nuclear as eligible since it is, they claim, low carbon. So the change to strike prices (Contracts for Difference) will give a new general subsidy to nuclear to offset the CCL levy. SAGE will be looking at the arithmetic. EDF stating publically that their costs will have to come down significantly may therefore be part of a sleight of hand, posing like a realistic reflection of EDF's overall woes. But there are also contrary indications.
At the Tory Party conference, New Junior Energy Minister Richard Harrington told a fringe meeting the complex funding arrangements for Hinkley C were likely to be scrapped and a new third model be developed, between direct state funding and the EDF strike price model. He said don't ask what the new model might be (Telegraph 3.10.17).
His boss Industry Secretary Greg Clark had set the scene out in the summer when he waxed eloquent about the UK being " on the verge of an energy revolution". He unveiled plans for battery research (see below) and a "new and more flexible energy system". In September, National Grid released figures showing the UK's "greenest ever" year, with nearly 52% of electricity coming from "low carbon" sources compared to 35% in 2013. Maybe it just means a specific strike price won't be agreed, but a general strike price regime will apply. The new Contracts for Difference papers were published in November last year, using offshore wind farms as an example. The first subsidy free solar farm in the UK has opened (see below).