Prediction, as Mervyn King once observed, is ‘a stab in the dark’. Who can say with confidence where the wholesale price of electricity will be in ten years’ time, let alone 45 years hence at the end of the contract struck by Energy Secretary Ed Davey with EDF of France for the building of the £16 billion Hinkley Point nuclear station? We can be pretty sure the price will be a lot higher than today’s and it’s not mad to think it might have doubled by 2023, which is the starting assumption of the EDF deal. David Cameron might be right that energy costs will be ‘lower than they might otherwise have been’ thanks to Hinkley, but Davey’s suggestion of a £75 annual nuclear discount on household bills by 2030 takes stabbing in the dark to a new level.
On the other hand, if the pattern of supply and demand changes in favour of the consumer by 2023, we may feel that we were outrageously legged over in guaranteeing the French a ‘strike price’ of £92.50
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