The chief executive of energy firm Scottish and Southern Energy (SSE) has warned that subsidies for nuclear power could result in higher bills for consumers.
Writing for the Daily Telegraph, Ian Marchant urged the government block subsidies for EDF Energy’s planned new nuclear reactors unless the supplier agrees to reduce its costs. While EDF is yet to confirm what subsidy it will need, it says the price will be below £140 per megawatt hour (MWh).
However, using estimates compiled by EDF in 2008, Mr Marchant insists that the cost should be closer to £65 per MWh and says the government should refuse to pay above £90 per MWh. Should the development at Hinkley Point go ahead, it would be the first of its kind for a generation.
“The difference between paying £65/MWh for new nuclear, versus £140/MWh for new nuclear, assuming we decide to build two reactors, will amount to over £2bn each and every year. That is around £70 for every household on top of the current electricity bill,” he observed.
Last month, SSE announced it was to increase its gas and electricity prices by nine per cent from October, citing higher wholesale costs.