Ministers and EDF still disagree on “five or six” issues over the building of Britain’s first new nuclear plant in a generation, Michael Fallon has said, insisting the French company does not have the Government “over a barrel”.
Talks over subsidies for the £14bn Hinkley Point project in Somerset were originally due to be concluded at the end of last year. But despite suggestions in recent weeks that the two sides were nearing agreement, energy minister Mr Fallon revealed: “We are still apart on five or six issues.”
The comment, in an interview with The House magazine, will cast renewed doubt on the project, which requires not only agreement with the government but also EU state aid approval and for EDF to secure financial partners.
EDF wants the Government to sign a long-term contract guaranteeing it a “strike price” for power from Hinkley Point, subsidised through levies on consumer energy bills.
Ministers are under intense pressure not to commit households to paying too much.Other key terms will include the duration, indexation, and clauses to protect EDF being disadvantaged by other changes in policy.
Asked at an npower event in London on Thursday about the prospect of a EDF securing a rumoured 35-year contract, Mr Fallon said: “Inevitably it is a reasonably lengthy contract if you’re going to get people to invest.
I would urge you to wait and see, if we are able to strike a deal, what the terms will be.” He insisted new nuclear plants were crucial to replace the old ones that are being retired, which produce about 17pc of Britain’s power. “We can’t afford to let 17pc disappear...
We need to maintain the energy mix,” he said. But in the magazine interview Mr Fallon rejected suggestions that the need for new nuclear plants left ministers in a weak negotiating position, citing plans by Japan’s Hitachi to build reactors in Gloucestershire and on Anglesey through the Horizon venture.
“We are not over a barrel,” he said. “We have Hitachi ready to come in... So we are not wholly dependent on Hinkley. We would like to do the deal with EDF but we are not going to do it at any price. “It’s a very complex negotiation and we are inching closer but we are not quite there yet.”
EDF said on Wednesday that negotiations "are continuing and both sides have characterised them as positive". Mr Fallon also made an enthusiastic case for shale gas exploitation in the UK, claiming: “It would be irresponsible not to see what’s down there.”
He described shale gas as “very important”, despite admitting its potential here is not yet known, and suggested businesses may move overseas unless Britain can cut its energy costs.
“Shale has dramatically lowered the cost of energy for industry in the States and it is very important that Western Europe is not put at a disadvantage, that we don’t start losing manufacturing processes, steel plants or chemical plants to the States because of the long term cheaper cost of energy there,” he said.
Promised tax breaks for gas explorers would be “firmed up by the summer” and “take effect from next April”, he said.
telegraph.co.uk
Talks over subsidies for the £14bn Hinkley Point project in Somerset were originally due to be concluded at the end of last year. But despite suggestions in recent weeks that the two sides were nearing agreement, energy minister Mr Fallon revealed: “We are still apart on five or six issues.”
The comment, in an interview with The House magazine, will cast renewed doubt on the project, which requires not only agreement with the government but also EU state aid approval and for EDF to secure financial partners.
EDF wants the Government to sign a long-term contract guaranteeing it a “strike price” for power from Hinkley Point, subsidised through levies on consumer energy bills.
Ministers are under intense pressure not to commit households to paying too much.Other key terms will include the duration, indexation, and clauses to protect EDF being disadvantaged by other changes in policy.
Asked at an npower event in London on Thursday about the prospect of a EDF securing a rumoured 35-year contract, Mr Fallon said: “Inevitably it is a reasonably lengthy contract if you’re going to get people to invest.
I would urge you to wait and see, if we are able to strike a deal, what the terms will be.” He insisted new nuclear plants were crucial to replace the old ones that are being retired, which produce about 17pc of Britain’s power. “We can’t afford to let 17pc disappear...
We need to maintain the energy mix,” he said. But in the magazine interview Mr Fallon rejected suggestions that the need for new nuclear plants left ministers in a weak negotiating position, citing plans by Japan’s Hitachi to build reactors in Gloucestershire and on Anglesey through the Horizon venture.
“We are not over a barrel,” he said. “We have Hitachi ready to come in... So we are not wholly dependent on Hinkley. We would like to do the deal with EDF but we are not going to do it at any price. “It’s a very complex negotiation and we are inching closer but we are not quite there yet.”
EDF said on Wednesday that negotiations "are continuing and both sides have characterised them as positive". Mr Fallon also made an enthusiastic case for shale gas exploitation in the UK, claiming: “It would be irresponsible not to see what’s down there.”
He described shale gas as “very important”, despite admitting its potential here is not yet known, and suggested businesses may move overseas unless Britain can cut its energy costs.
“Shale has dramatically lowered the cost of energy for industry in the States and it is very important that Western Europe is not put at a disadvantage, that we don’t start losing manufacturing processes, steel plants or chemical plants to the States because of the long term cheaper cost of energy there,” he said.
Promised tax breaks for gas explorers would be “firmed up by the summer” and “take effect from next April”, he said.
telegraph.co.uk
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