Question to the Department for Business, Energy and Industrial Strategy:

To ask Her Majesty's Government when the Hinkley Point C nuclear power station is due to come on stream; what its output rate will be; what is the estimated total subsidy per year for each of the first three years of operation; and who will pay that subsidy.

Hinkley Point C is scheduled to come online from 2025 with an electricity generating capacity of 3.2 GW. This represents 7% of the UK’s electricity needs based on estimated demand in the period 2025-2030.

The Contract for Difference (CfD), agreed in September 2016, is an agreement for the Low Carbon Contracts Company Limited (LCCC) on behalf of electricity bill-payers to pay the generator the difference between the wholesale market price and a ‘strike price’ for every megawatt hour of electricity that it generates.

The payments under the Hinkley Point C CfD will depend on wholesale prices at the time. In our published 2016 HPC value-for-money assessment, it was shown using a central scenario based on 2016 prices that the support payments in the first three years of the plant’s operation from 2025 are expected to be approximately £590m, £860m and £860m respectively (2012 prices, undiscounted).

The difference payments under the CfD are only one element of a consumer's electricity bill, which will also include the wholesale price of electricity. A fall in the wholesale price would result in an increase in top-up payments, and conversely an increase in the wholesale price would result in a fall in top up payments, and payments by the generator to the LCCC should the wholesale price rise above the strike price. The overall price paid for electricity generated by HPC is therefore fixed at the strike price for the contract term of 35 years, after which the difference payments will stop.