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Wait, so you are saying the Government would actually make quite a nice profit out of Hinkley Point C? That this strike price is the strike of a forward contrac

Wait, so you are saying the Government would actually make quite a nice profit out of Hinkley Point C? That this strike price is the strike of a forward contract rather than a put option contract? But then this does not look like a bad outcome for the UK Government (and by extension the UK consumer) at all, it looks like a really profitable arrangement. Am I missing something?

ZeroGravitas 4y ago
Generally it's a really good system, which is being adopted around the world. For Hinckly, it's the French taxpayer that will be on the hook if there are cost overruns building the plant, because we already know exactly how much they can make from energy for the next decade. (That's why their CFO resigned when they decided to go ahead: https://www.reuters.com/article/uk-edf-britain-nuclear-idUKKCN0W80ZI https://www.reuters.com/article/uk-edf-britain-nuclear-idUKK...) For the UK taxpayer, they'll probably be paying too much for power they could have got cheaper, but at least the price is somewhat limited, unless there's any kind of accident or issues with storage. The key missing element with nuclear is that you don't have a vibrant market of competitive bidders, which is what drives the price down in wind and solar.