"I'm worried about consumers’ bills": Energy firm boss blasts long price deals to encourage new nuclear plants

Friday, March 15, 2013

THE boss of one of Britain’s biggest energy giants has blasted Government plans to encourage new nuclear plants.

Paul Massara, chief executive of RWE npower, said contracts lasting up to a rumoured 35 years, to guarantee generators a minimum price for electricity, would be “wrong”.

Ministers are being pressured to offer lengthy terms to get firms to commit to the vast cost of building nuclear power stations.

An estimated £110billion of ­investment is needed.

Under a system known as “contracts for difference” they’d have surety about how much they get paid.

If the market for electricity fell below a so-called “strike price”, a surcharge would be added to customers’ bills.

If it rose, there would be a refund.

But there are concerns about the level of the strike price – said to be nearly £100 a megawatt hour.

Experts fear it could add even more to already sky-high energy bills.

Massara told the Daily Mirror: “My worry is that, if you’re negotiating with a limited number of parties, and you are signing 35-year deals, is that the best thing for customers?

"I think it would be the wrong thing to do.

“Personally, I wouldn’t have that length contract. The risks have to be firmly set on the provider, not on the Government.

“I am worried about consumers’ bills and anything that adds to those bills is a problem.”

RWE npower knows a thing or two about nuclear because it pulled out of a venture to build reactors last year.

It, along with E.ON, blamed rising costs for ditching its involvement in Project Horizon.

Then earlier this year, British Gas owner Centrica withdrew from the UK’s nuclear rebuilding programme because of increasing costs and delays.

The company had the option of taking a 20% stake in four new reactors in a partnership with EDF, the French state-owned utility.

EDF is expected to be granted planning permission to build Britain’s first new nuclear power plant in a generation, at Hinkley Point in Somerset, next week.

Massara added: “I don’t think consumers really understand the fact their energy bill is going up due to Government policy.

“There should be an open and honest conversation with consumers that their bill will be going up because of those policies, as much as anything else.

"There are too many add-ons and there isn’t enough transparency from the Government.”

Hitachi, which took over the Horizon contract, is awaiting the outcome of the EDF price talks.

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