The British government and EDF Group, the French state-controlled utility, announced yesterday they had reached a long-elusive agreement to build the first nuclear power station in Britain in a generation, at Hinkley Point in south-west England.

The overall costs would be £16 billion (€18.8 billion) in 2012 terms with consumers and taxpayers covering most of the bill. EDF will be guaranteed a price of between £89.50 and £92 per megawatt hour for 35 years, depending on whether it later goes ahead with another plant called Sizewell C that might reduce costs. The British government will guarantee 65 per cent of the upfront cost of the Hinkley Point C reactors.

EDF said it expected to make a return on investment of about 10 per cent. Two Chinese companies, China General Nuclear and China National Nuclear, will take a stake of 30 to 40 per cent in Hinkley Point. According to EDF, which is working with the two Chinese companies on nuclear power stations in China, the companies will be "strategic and industrial partners" in the project.

Areva, the French nuclear designer and builder, will take a 10 per cent stake and will do key work on the project, including the nuclear steam supply system and instrumentation.

EDF said discussions were under way with other parties that could take up to 15 per cent of the equity. EDF says it will probably wind up with a stake of 45 to 50 per cent. – (New York Times )