Hinkley Point C news: Ofgem cuts costs to £656m
Hinkley Point C news update: Energy regulator Ofgem has decided to lower the cost of connecting the nuclear plant to the grid. Read on to learn more about these costs and how they will affect you as a consumer.
Energy regulator Ofgem confirmed its decision on Friday, 22 May to cut the cost of the Hinkley Point C (HPC) grid link by £60 million. The link, known as the Hinkley-Seabank connection, will connect the HPC nuclear power station to the grid.
The power station, which EDF Energy is building along with China General Nuclear Power Corp (CGN), is expected to begin generating power by the end of 2025. It’s the first nuclear power plant to be built in Great Britain in decades and is expected to provide around 7% of the country’s electricity once it’s complete.
The link that will connect it to the electricity transmission network is due to be completed in 2024. According to Hinkley Point C news from Ofgem, “It will be one of the largest extensions of the transmission network in recent decades.”
National Grid will pay for the construction of the grid link, but Ofgem actually determines how much they can spend. The network operator originally requested to spend £716 million on the connection project, but Ofgem has slashed that amount to £656 million.
This Hinkley Point C news comes just months after Ofgem proposed cutting costs for the link by nearly £80 million in October 2019. Following further consultation and analysis, the energy regulator concluded that some of the costs were actually appropriate and would provide value for money.
These justified costs include the following:
- £11.3 million related to developing the project’s T-Pylon electricity towers
- £5.8 million related to project contingency
- £1.6 million related to project management
Ofgem says it will use its network price control framework to allow National Grid to pay for the project and regain the cost from consumers’ energy bills over a 45-year period.
As for the actual power plant, that is being funded by EDF Energy and CGN. Construction of the plant was originally estimated to cost £18 billion; however, the latest Hinkley Point C news reports from EDF now say that the total cost is expected to be around £22 billion.
What does this Hinkley Point C news mean for consumers?
According to Ofgem, cutting costs on the project will save consumers money on their energy bills.
Even though National Grid is the one paying upfront for the costs of the link, consumers will actually be paying the costs back to the company over the next 45 years.
Through energy bills, National Grid already charges consumers for upgrades to the electricity network. Individual households currently pay around 10p per day (or £36.50 per year) to the monopoly for this upkeep.
In order to prevent your energy bills from going up, you should make sure that you’re on a fixed tariff for your electricity. This will guarantee that your rates will not increase for the length of the contract.[custom_block:44]