Oil and gas contractors and companies are looking at ways to make their operations commercially viable. This has prompted many to reduce staff and close down oilfields in the high-cost North Sea. At the same time, the UK Government is exploring green energy alternatives.
It therefore surprised many when Prime Minister Theresa May gave the go-ahead to Hinkley Point C nuclear power station.
The cost of building the power station will be approximately £30 billion, and this amount will come from energy consumers. This move by the Government has created a furore among the energy firms in the country. The companies want the electricity bill to clearly state the amount that households in the UK will be charged for funding the power station. The firms believe that an itemised bill will prevent consumers from blaming them for higher bills.
French firm EDF has received the mandate to construct Hinkley Point C, and will receive backing from CGN in China. It is anticipated that the nuclear power station will become operational in the 2020s, and that is the time that the cost for the construction will be recovered from the consumers.
North Star Solar CEO Paul Massara stated that consumers can expect to pay anywhere from £12 to £45 annually for Hinkley Point C.
At the moment, energy firms are asking the UK Government to be more transparent about the costs that consumers have to bear in the form of taxes. It is estimated that nearly 13 per cent of current electricity bills are for social and environmental costs, and 4.76 per cent is the VAT.
Ofgem clarified that energy companies have the option to itemise their bills, but several do not use it. The energy regulator went on to add that suppliers have to notify consumers of their cheapest energy tariff through their bills.