EDF boss defends Hinkley Point plans

LONDON (ShareCast) - (ShareCast News) - The chief executive of EDF Energy has defended plans to build Hinkley Point C nuclear power station, and told the BBC the project is not too expensive. The project in Somerset has been criticised for the £24.5bn price tag, delays with investment decisions and delays to the building timetable.

The original plan was for it to start generating electricity by 2023, but there still isn't a start date for construction.

Vincent de Rivaz told the BBC on Thursday that power from nuclear plants would cut bills compared with low carbon without nuclear power.

There are also concerns about the government guarantee that EDF Energy will receive £92 per megawatt hour - twice the current wholesale price for power.

EDF (Paris: FR0010242511 - news) said it needed the guarantee as the price of energy would be much higher in the future.

"You cannot compare the price in the next decade with the price of today, which is being depressed by the current low price of gas.

"We have to protect ourself against volatility." De Rivaz told the BBC it was similar to replacing a car with a new one.

"[It (Other OTC: ITGL - news) 's] more expensive but you will get a much better car." He also rejected suggestions that building gas power plants would be more cost effective, pointing out the UK would have to import billions of pounds worth of gas from elsewhere and risk putting the country at the mercy of geopolitics.

EDF Energy announced two further preferred bidder contracts worth over £100m on Thursday.

London-listed engineering group Rolls-Royce is set to supply heat exchangers to be used at Hinkley in a contract worth over £25m. In addition, a partnership between Rolls-Royce and Nuvia has been selected as the preferred bidder for a contract valued at more than £75m to design, procure, install and commission two systems for the treatment and waste processing of reactor coolant.

Earlier this week Chancellor of the Exchequer George Osborne also secured investment from China by guaranteeing a £2bn deal under which China will invest in the plant.

The deal will be signed next month during the Chinese president's visit to the UK.