Hinkley Point expected to 'get go-ahead'

Hinkley Point in Somerset already houses two power stations

The French energy giant EDF is expected to make its long-awaited final investment decision on a new nuclear power plant at Hinkley Point in Somerset next week.

The company says it has called a board meeting for 28 July and the investment decision is on the agenda.

BBC correspondent John Moylan said the firm's board is expected to give the plant the go-ahead.

It was initially due to cost £12bn, but recent estimates put the cost at £18bn.

Last week the new Chancellor of the Exchequer Philip Hammond said the government remained committed to building a new nuclear power station at Hinkley Point in Somerset, despite the rising potential cost to the consumer of the electricity it will produce.

He said Hinkley was vital to a strong economy and still worth the cost.

'Financial capacity'

As part of the 35-year deal signed with France's EDF in 2013 to build the plant, the government agreed to pay £92.50 for each megawatt hour of electricity.

Wholesale energy prices have fallen since the price was agreed, leaving the government to make up the difference.

The UK's National Audit Office estimated future top-up payments would rise from £6.1bn to £29.7bn over the length of the contract.

Analysis: John Moylan, BBC industry correspondent

Is Hinkley Point C finally about to get the green light?

It's hard to interpret EDF's announcement late on Thursday night in any other way.

For the company to announce that it had called a board meeting and that the Hinkley decision is on the agenda sends a strong signal that it expects approval to be given.

It's also clear that the French government is on board. With its 85% stake in EDF, its approval would have been needed for the company to move to this crucial stage.

But the board still has to take the decision. With so much at stake, the possibility of a further delay can't be ruled out.

Hinkley Point C, which would provide 7% of the UK's total electricity requirements, had originally been meant to open in 2017.

But it has been hit in recent months by concerns about EDF's financial capacity to handle the project.

While one third of the £18bn capital costs of the project are being met by Chinese investors, Hinkley Point would remain an enormous undertaking for the stressed French company.

In its statement confirming next week's board meeting, EDF said Hinkley Point C was a "major element" of its low-carbon growth strategy.

The two "reactors at Hinkley Point would strengthen EDF's presence in Britain, a country where its subsidiary EDF Energy already operates 15 nuclear reactors and is the largest electricity supplier by volume," it added.

'Open for business'

Welcoming the news of the meeting, the Business and Energy Secretary Greg Clark said: "It's clear that we are open for business as we come closer to sealing the deal on this major investment in British infrastructure and British jobs.

"New nuclear is an essential part of our plan for a secure, clean and affordable energy system that will power the economy throughout this century.

"This is a welcome decision from EDF, and we look forward to the outcome."