LONDON, June 18 The UK government is considering
linking the guaranteed price for electricity from new nuclear
plants to inflation to sweeten a deal with France's EDF
, a senior industry source said.
"It's not clear yet what measure of inflation (will be used)
but it's very rational for a nuclear deal," said an industry
source close to the discussion who asked not to be identified.
The government and EDF are locked in tough negotiations
about the minimum price for electricity produced from the firm's
proposed Hinkley Point nuclear plant, Britain's first new
nuclear plant in several decades.
Britain wants to replace ageing power stations with new
generation nuclear plants that will keep carbon emissions low.
Three consortiums have come forward with plans to build 16
gigawatts of new nuclear plants by 2025 but Japan's Fukushima
crisis and funding issues have delayed the programme.
The outcome of talks with EDF could set the tone for future
energy infrastructure investments in Britain.
A so-called contract for difference (CFD) will mean EDF can
count on a set price for its electricity but will have to repay
the state if the market price rises above this level.
Linking the price to inflation will ensure it maintains
value over time as inflation levels are prone to change.
"Negotiations are ongoing. Government is working closely
together on these negotiations with EDF," said a spokesman for
Britain's Department of Energy and Climate Change (DECC).
EDF declined to comment.
DECC is expected to publish CFD strike price details for
offshore wind installations in the summer, an announcement that
will shed some light on price levels the government is willing
to set as money set aside for both will come out of the same
Britain's Energy and Climate Change Secretary Edward Davey
told Reuters on Tuesday there was plenty of interest in
investing in nuclear in Britain and not just from EDF. He said
he had talks with representatives from Hitachi in
Hitachi plans to build four to six new nuclear reactors in
He also said there was interest from GDF Suez,
Iberdrola, Toshiba Westinghouse and South
Korea about investing in Britain's nuclear future.
GDF Suez and Iberdrola own a joint venture that wants to add
3,600 megawatts of new nuclear capacity to Britain's power