EDF Energy welcomes continued momentum on Electricity Market Reform
Energy Bill will help deliver crucial investment in nuclear and other low carbon generation
Today’s publication of the Energy Bill confirms the Government’s continued momentum on Electricity Market Reform. The new investment framework is crucial for the low carbon investment the country needs.
The reforms pave the way for a balanced deal for all parties. They will deliver competitively priced energy for customers, security of supply for policy makers and a stable return for investors.
New nuclear has a vital role in a balanced mix. It will help meet the UK’s goals for climate change, security of supply and affordability. It is the most affordable large scale, low carbon choice. It can limit any increase in bills and can also play a key role in restoring economic growth - it represents billions of pounds of investment that will create thousands of new jobs and provide a major boost to local communities.
We, and our partners Centrica, plan to take our final investment decision at the end of this year. Continued momentum through parliamentary process and timely agreement on the reforms are vitally important for our decision. This is equally important for all other investors in low carbon technologies.
This means that it is vital to reach a fair and balanced agreement on the Contract for Difference feed in tariff. This will provide clarity for the future price of electricity produced from low carbon sources.
Further, because decisions need to be made now, a transitional process is being introduced.This will provide investors with the clarity they need to make their investments in a timely way The right investment framework – with the Contract for Difference at its heart - will enable us to move ahead with plans at Hinkley Point in Somerset for the UK’s first two new nuclear plants for a generation.
The deal on Contract for Difference needs to be legally robust, easily understood and widely supported by all classes of investor. We welcome the chance to comment on the model and are confident a viable model will be established.
EDF Energy Chief Executive Vincent de Rivaz said:
"We are on track to deliver what is needed for the UK. Today’s announcement maintains the momentum on electricity market reform. Our job is to keep focused on the delivery of our new nuclear plans at Hinkley Point. Over the coming weeks and months, our priority is assembling the right project, building a clear view on cost and timetable and agreeing a fair deal with Government.
"Nuclear must be competitive with other low carbon generation. The Contract for Difference will reflect that requirement. It is vital that we reach a balanced deal which fair for all parties: Government, consumers and investors. It is only by being fair, that a deal can be sustainable for the long term. We will be open and transparent on this.
"Our task now is to work through the detail of the Bill with officials and other stakeholders to ensure its provisions best meet the needs of customers, policymakers and investors.
"We look forward to actively engaging with the Energy and Climate Change Committee on the pre-legislative scrutiny process and to the legislation achieving Royal Assent as early as possible."
"I am confident that new nuclear in the UK should and will go ahead. 2012 is defining year for new nuclear – and there is a need to maintain the current momentum. A huge amount remains to be done – but we are determined to do it. We are absolutely focussed on having a viable business case at the end of the year."
The UK needs investment in a diverse mix of energy sources including nuclear, gas and renewables.
EDF Energy is investing in all three and will commission a new 1300MW CCGT plant in Nottinghamshire this Autumn and the 62MW Teesside Offshore Windfarm before the end of the year. We are also developing with partners Eneco the Navitus Bay Wind Project, a circa 900 1200MW offshore windfarm near Isle of Wight.
For our part, we have made significant progress which demonstrates our determination to make new nuclear a success. We are getting on with the job. We are bringing together the efforts of our own people, suppliers including Areva, Government and the local community.
Recent milestones on our nuclear new build projects include:
We began site preparation work at Hinkley Point C in February 2012. This followed permission from the local authorities last year and agreement on a £30 million package of mitigation.
Following three years of consultation EDF Energy submitted its application for a Development Consent Order to build and operate Hinkley Point C in October 2011. The Planning Inspectorate (formerly the Infrastructure Planning Commission) has begun its assessment and is expected to make its recommendation later this year.
We have continued our engagement with the supply chain and in December 2011 held our third National Supply Chain event involving more than 350 companies. We have let contracts including a £100 million-plus contract to Kier Bam for civils work to prepare the site.
Following four years of work by EDF and Areva, in December 2011 the joint regulators (Office for Nuclear Regulation and Environment Agency) issued interim design acceptance confirmation for the EPR Pressurized Water Reactor, describing this themselves as a major milestone in the process. Working together with AREVA, the ONR and the EA, we hope to close out the design acceptance process by the end of the year.
We are developing the skills and jobs to deliver the project. The project will employ up to 25,000 people over the course of construction with 5,600 people on site at peak. There are already in excess of 700 people in UK and France working on the Hinkley Point C project. We have announced a £15 million investment to develop a world class training centre in Somerset.
In addition, we plan to undertake initial consultation on Sizewell C by the end of this year.