It’s Official: The United Kingdom is to subsidize nuclear power, but at what cost?

This report analyzes the subsidies provided by the United Kingdom government for the Hinkley Point C nuclear power project. It argues that the combination of price guarantees, loan guarantees, and capped liabilities creates significant financial risk for the public, with total costs that are difficult to estimate due to long-term uncertainties in energy prices and the history of nuclear cost overruns.

• The United Kingdom government has implemented a Contract for Difference (CfD) for Hinkley Point C, guaranteeing a 'strike price' of GBP 92.50 per MWh (linked to Consumer Price Inflation) for 35 years. This price may drop to GBP 89.50 if the Sizewell C site is also developed. The GSI estimates the total net present value of this effective subsidy could range from GBP 3 billion to GBP 40 billion, depending on future wholesale power inflation.
• The government provides loan guarantees through the UK Guarantees scheme, which for Hinkley Point C amounts to GBP 17 billion. GSI estimates that these guarantees could reduce borrowing costs for the project by 2–5%, representing a public subsidy valued between GBP 7.5 billion and GBP 18.4 billion over 35 years.
• Waste disposal costs for Hinkley Point C are capped at GBP 5 billion under a Waste Transfer Contract (WTC). While current expected payments are around GBP 2.3 billion, any costs exceeding the GBP 5 billion cap will be covered by the government.
• The government limits the liability of nuclear operators for accidents to GBP 1.2 billion. Any clean-up costs exceeding this amount must be met by the government, effectively providing a subsidy in the form of implicit insurance.
• Decommissioning costs for Hinkley Point C are subject to a Funded Decommissioning Programme (FDP), but the government may ultimately be responsible for cost overruns. The report notes that decommissioning costs for legacy sites, such as the Sellafield complex, increased by more than GBP 15 billion between 2010/11 and 2013/14.
• The report concludes that the combined known subsidies (CfD and loan guarantees) result in a per-unit subsidy between GBP 11.6 and GBP 64.7 per MWh. This package creates an opportunity cost that may prevent investment in less risky technologies, such as onshore wind and other renewables.

APA

Bridle, R., & Attwood, C. (2016). It’s Official: The United Kingdom is to subsidize nuclear power, but at what cost? International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/united-kingdom-subsidize-nuclear-power-at-what-cost.pdf

Chicago

Bridle, Richard, and Clement Attwood. It’s Official: The United Kingdom is to subsidize nuclear power, but at what cost? International Institute for Sustainable Development, 2016. https://www.iisd.org/system/files/publications/united-kingdom-subsidize-nuclear-power-at-what-cost.pdf.

Wikipedia

{{cite report |last1=Bridle |first1=Richard |last2=Attwood |first2=Clement |title=It’s Official: The United Kingdom is to subsidize nuclear power, but at what cost? |publisher=International Institute for Sustainable Development |date=February 2016 |url=https://www.iisd.org/system/files/publications/united-kingdom-subsidize-nuclear-power-at-what-cost.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bridle2016its, author = {Bridle, Richard and Attwood, Clement}, title = {{It’s Official: The United Kingdom is to subsidize nuclear power, but at what cost?}}, institution = {International Institute for Sustainable Development}, year = {2016}, month = feb, url = {https://www.iisd.org/system/files/publications/united-kingdom-subsidize-nuclear-power-at-what-cost.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }