Labour’s Tom Greatrex told Utility Week: “Being in the position where there’s only one player makes it a pretty one-sided negotiation.”
He said Labour supports new nuclear “but not at any price” and that Parliament should be able to scrutinise the deal with EDF Energy to ensure “a palatable headline price” was not agreed at the expense of other details.
Stephen Hunt, analyst at UBS, agreed EDF Energy was “very much in the driving seat in terms of having the stronger hand” in the talks with the UK government.
He said the strike price for Hinkley Point C, which is expected to be about £95/MWh, if linked to the consumer price index (CPI), would be closer to £113/MWh by 2020.
Roland Vetter, analyst at CF Partners, said he was not “surprised EDF was pushing for it ” and that an “unofficial deal” has been agreed between the company and the government.
He said the inflation link was something EDF Energy wanted “because it makes for a very good opportunity to sell parts of the project to investors at a very good price”.
Vetter added that a CPI-linked strike price would result in revenues to EDF of £143 billion over the expected 35 years of the contract, compared with £86 billion if the contract was not linked to inflation.
EDF Energy and the Department of Energy and Climate Change said talks were “ongoing”.