Ofgem proposes cutting Hinkley Point funding by £80m

The UK’s energy regulator has proposed cutting funding by £80m for the project that links the new Hinkley Point C nuclear reactor to the electricity grid after rejecting some of the National Grid’s requests for cash.

Ofgem said it plans to grant National Grid Electricity Transmission £637m, compared with an initial request for £717m, and that the new funding framework would save customers money.

The UK’s first new nuclear power plant in three decades has been hit by delays and spiralling costs. The project in the south-west of England by French state-backed energy utility EDF and Chinese state-backed CGN.

Last month, EDF warned that it will cost an extra £2.9bn to complete the plant in the south-west of England and that it was likely to open later than planned.

The link to the grid, known as the Hinkley-Seabank plan, is a key overhaul of the power network to send electricity from the new plant to the rest of the country, and has emerged as a flashpoint between Ofgem and the National Grid.

On Tuesday, Ofgem said it has rejected £40m in “risk funding” that NGET had sought to be included in the upfront cost of the link, and that it is also not satisfied that additional costs for a proposed new type of pylon are justifiable.

Ofgem will make a final decision on the cost and on which funding model to use following a six-week consultation.

The National Grid said in a statement that it will review the consultation and “provide further evidence to Ofgem to support our view of the capital costs for this project”.

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“These consultations on Hinkley-Seabank do not affect the delivery of the project, which is progressing well,” it said.



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