Government to waste Taxpayers Money on Nuclear Power

[Lobsterboyuk]

Not a guaranteed profit though, they've just fixed the price, and if EDF are as bad as you say they are then they won't be making much profit at all

 

Not true about just fixing the price. Although not reported widely yesterday there are also a number of other murky subsidies and guarantees potentially available to EDF in this deal, e.g. from the Telegraph:

 

 

Still not a done deal

The main terms of the 'contract for difference’ have been agreed but they are not legally binding; negotiations continue over the full contract.

EDF also needs to get all its funding in place; it must finalise agreements with equity partners and also secure debt.

The contract is not the only subsidy; EDF has also been promised a 'loan guarantee’ from the Treasury of up to £10bn, to act as a guarantor if EDF and its partners defaulted on their loans; another measure designed to reduce borrowing costs. The terms of this guarantee are yet to be finalised.

The various subsidy measures for Hinkley will then need to secure state aid approval from the European Commission. Mr Davey said ministers had been engaged with EU officials on the subject for some time.

 

http://www.telegraph.co.uk/finance/newsbysector/energy/10395169/Hinkley-Point-good-for-Britain-says-Ed-Davey.html

[MooseBreath]

That's all well and good but there is still nothing in there that suggests a guaranteed profit. Of course the government are going to have to offer incentives to reduce risk. The only way it is guaranteed profit for EDF is if the government take on all the risk and if they were willing to do that they'd just build it themselves. The most obvious risk for EDF is the one you mentioned earlier, ie there is a risk of it going way over budget

[ADK]

The question is whether the price is a good deal or not and that depends on who you ask. In my opinion it's a fairly generous price.

[Lobsterboyuk]

That's all well and good but there is still nothing in there that suggests a guaranteed profit. Of course the government are going to have to offer incentives to reduce risk. The only way it is guaranteed profit for EDF is if the government take on all the risk and if they were willing to do that they'd just build it themselves. The most obvious risk for EDF is the one you mentioned earlier, ie there is a risk of it going way over budget

 

Really? Looking like a 10bn loan guarantee (so they can borrow at dirt cheap rates) and 83bn in guaranteed revenue at the minimum seems excessively profitable for the consortium involved to me with the UK tax payer and energy users paying through the nose.