Electricity Supply

Debate between Baroness Bloomfield of Hinton Waldrist and Lord Bishop of Salisbury

Wednesday 3rd February 2021 Lords Chamber

[Baroness Bloomfield of Hinton Waldrist (Con)]

The cost escalation will be entirely borne by the developer. It is one of the reasons why we will pay £92.5 per megawatt hour for the electricity produced from this site. Delays have increased costs, but it had already been announced in 2019 that there was likely to be a delay and that the increased cost would be £500 million. Covid has had a significant effect. In trying to have workers on a socially distanced site, numbers have dropped from 3,800 to 2,000. Post-Covid, the figure is expected to get up to 7,000 employees.

[The Lord Bishop of Salisbury [V]]

My Lords, the price of electricity from Hinkley is remaining unchanged at £92.50 per megawatt hour, and EDF is expecting the same profit of more than 7.1% on its investment. Given that, can the Minister explain the points that she has just made about how the additional 30% of construction costs on the initial £18 billion budget is being absorbed at no cost to consumers? As the price of electricity from renewables has dropped—with wind now at £40 per megawatt hour—might not research and development into renewals have been a better investment? Hinkley already looks like transitional technology.

[Baroness Bloomfield of Hinton Waldrist (Con)]

The truth is that we need a blend of all these technologies to produce the low-carbon power we will need by 2050. We negotiated the contract with EDF and CGN so that they would bear the full costs of any escalation in construction. The £92.5 price cannot directly be compared with the price for more intermittent forms of generation. I hope that satisfies the right reverend Prelate.