Electricity prices in the UK have risen so much that the cost of a controversial new nuclear power station, which has been criticised for being too expensive, now seems reasonable.
Wholesale electricity prices rose above 100 pounds ($139) per megawatt-hour for the first time since 2008. This is higher than the government's Guaranteed Rate for power generated from Electricite de France SA's Hinkley Point C nuclear plant, which is under construction.
The so-called use price of £ 92.50, set in 2013, was described by the National Audit Office as “high-cost and risky in a changing energy market.” The level was about twice that of the wholesale market at the time.
Electricity prices are rising because of the rising cost of natural gas, as concerns about low inventories and a lack of October supply push UK prices to their highest level since 2005.
Hinkley Point C won't be online until 2026, but its price guarantee lasts 30 years. The mechanism, called the contract of difference, is also used to subsidise offshore wind farms.