The government has finally given Hinkley Point C in Somerset the green light after it came to an agreement with French-owned EDF Energy on the amount it will receive for the electricity it produces.
Ministers say the deal will help take the UK towards low-carbon power and lower generating costs in future.
Critics warn guaranteeing the group a price for electricity at twice the current level will raise bills.
“For the first time, a nuclear station in this country will not have been built with money from the British taxpayer,” said Secretary of State for Energy Edward Davey.
The two reactors planned for Hinkley, which will provide power for about 60 years, are a key part of the coalition’s drive to shift the UK away from fossil fuels towards low-carbon power.
The two sides have now agreed the “strike price” of £92.50 for every megawatt hour of energy Hinkley C generates. This is almost twice the current wholesale cost of electricity.
This will fall to £89.50 for every megawatt hour of energy if EDF Group goes ahead with plans to develop a new nuclear power station at Sizewell in Suffolk. Doing both would allow EDF to share costs across both projects.
If Sizwell C does get the green light, there will be 25,000 jobs created during the construction process alone.
However, there are concerns on the cost to customers as a result of this.
Ed Davey said ” While consumers won’t pay anything up front, they’ll share directly in any gains made from the project coming in under budget”
However, Dr Paul Dorfman, from the Energy Institute at University College London, said “what it equates to actually is a subsidy and the coalition said they would never subsidise nuclear”.
He added: “It is essentially a subsidy of between what we calculate to be £800m to £1bn a year that the UK taxpayer and energy consumer will be putting into the deep pockets of Chinese and French corporations, which are essentially their governments.”