LONDON, Oct. 23 (UPI) -- An agreement reached this week on electricity "strike prices" for a new nuclear power plant could spur more such development in Britain, an analyst says.
Analyst Daniel Grosvenor, head of Deloitte's British nuclear practice, told the Daily Telegraph the deal between the government and French energy company EDF on the proposed $25 billion Hinkley Point 3 plant would "open the floodgates" for more investment in the sector.
It "shows that the U.K. can attract the international investment our energy sector desperately needs," he told the newspaper.
British Energy Secretary Ed Davey announced Monday long negotiations with EDF and its two Chinese partners -- the state-owned China National Nuclear Corp. and China General Nuclear Power Corp. -- have produced an agreement on a strike price at which the plant's electricity would be sold into the British grid.
Under deal, EDF is guaranteed $144.50 per kilowatt-hour over 35 years, which is twice the current wholesale electricity price. British taxpayers would subsidize the difference as a means of converting the country's energy mix to low-carbon sources.
The deal, however, must receive the backing of the European Union to proceed. It could be met with opposition in Brussels, where the European Commission this month came out against automatically including nuclear along with wind and solar as a "low-carbon" energy source deserving of taxpayer subsidies.
The move came at the urging of Germany, which is phasing out nuclear power.
Britain, meanwhile, is hoping the Hinkley Point deal will open the door to further nuclear power expansion, specifically at EDF's Sizewell station in Suffolk, where the French company is seeking to build a similar 1,600-megawatt twin-reactor unit.
"If state aid clearance can be secured [from the EU], the U.K. contract for difference [strike price] will increasingly be seen as a potential mechanism for enabling finance and private sector investment in low-carbon generation across the continent," Deloitte's Grosvenor told the Telegraph.
The 1,600-megawatt Hinkley Point C in Somerset would be the first of the new European pressurized reactors in Britain, capable of supplying 6 million homes (nearly twice the number of homes in London) and producing 7 percent of the country's electricity by 2025.
It would join the existing 870-megawatt Hinkley Point B, commissioned in 1976 and scheduled for retirement in 2023.
The strike price agreement, reached after months of wrangling over the amount of the strike price, "paves the way" for the plant's construction, Davey said, predicting it would create 25,000 construction jobs and as 900 long-term positions over the course of its 60-year operating life.
"Eight of the nine operational nuclear power stations in the U.K. will reach the end of their planned life in the next decade," he said. "So the agreement today is a demonstration of the government's commitment to a new fleet of nuclear power stations to replace those due to close and to protect Britain's future energy security."
Prime Minister David Cameron also hailed the agreement, calling it "brilliant news for the South West and for the country as a whole.
"As we compete in the tough global race, this underlines the confidence there is in Britain and makes clear that we are very much open for business."