New nuclear plant sparks row over cost of electricity
Nuclear power is an essential ingredient in tempering future energy price rises.
That's the view of business organisation the CBI following the announcement that the UK will build its first new nuclear power plant at Hinkley Point in Somerset, England.
"New nuclear plants must be a fundamental feature of our future energy landscape, and Hinkley Point C is the starter gun to securing the investment we need," CBI Director General John Cridland said.
Critics said the deal with a consortium of investors and led by French energy firm EDF will lead to higher energy prices but Mr Cridland said the investment will help mitigate the impact of increasing costs.
"The fact is whatever we do, energy prices are going to have to go up to replace ageing infrastructure and meet climate change targets – unless we build new nuclear (plants) as part of a diverse energy mix."
EDF has been guaranteed a price of £92.50 per megawatt hour (MwH) when the plant is up and running in 2023, roughly twice the current electricity price.
That's to give the consortium some form of guaranteed return for such a long-term investment.
If, in 10 years' time, the electricity price is below that level, then the government will pay EDF the difference, not from its own coffers but from electricity users.
But if the price is higher than £92.50/MwH, then EDF will pay back the difference to users.
For businesses in Northern Ireland, the decision to build a nuclear power plant in England won't have a significant impact, according to Brian Gray, the head of Manufacturing Northern Ireland.
"There's a whole different series of market forces at play in Ireland than there are in Great Britain," he said.
"The only impact it's likely to have is on demand for power from here because this nuclear plant is so expensive we're likely to see more Irish power used in Great Britain."
Nevertheless, the prospect of a ramp up in electricity prices in the years ahead remains a big concern for manufacturing companies in Northern Ireland, particularly those which operate on a global basis such as aerospace company Bombardier.
"Energy costs in Northern Ireland are more than three times higher than those of our sister sites in North America, and significantly higher than the costs faced by many of our other global competitors," a spokesperson for the Canadian-owned firm said. "This directly affects our competitiveness and our ability to both retain work and jobs, and win new work, particularly as we expect to increase our energy usage following recent major investments in new programmes."