Hinkley Point nuclear plant deal 'risky and expensive', says watchdog

British households are locked into a "risky and expensive project" as a result of a government deal to build a new £18bn nuclear power plant at Hinkley Point, warned the National Audit Office (NAO).

The independent spending watchdog said the value-for-money tests for the plant are "marginal and subject to significant uncertainty".

The NAO added the value of the deal depended on assumptions about the cost of fossil and renewable energy decades into the future. It said top-up payments by the government, set to be added to consumer bills, have soared from an estimated £6bn to £30bn since the commercial terms were agreed in 2013.

The Department for Business, Energy and Industrial Strategy (BEIS) finalised the final deal for the Hinkley Point C reactor last September, with electricity prices guaranteed for its owners for the plant's first 35 years. The site is set to provide 7% of the country's power requirements.

State-controlled French energy firm EDF is funding two-thirds of the project, which will create more than 26,000 jobs, with China investing the remaining £6bn. The plant is expected to open in a decade.

Critics of the deal have warned of escalating costs and the implications of allowing nuclear power plants to be built in the UK by foreign governments.

The NAO pointed out that the private sector bears the risks over building overruns, but the government has not taken into account that falling fossil fuel costs in the future will cut wholesale prices of electricity.

Amyas Morse, head of the NAO, added: "The department has committed electricity consumers and taxpayers to a high cost and risky deal in a changing energy marketplace.

"Time will tell whether the deal represents value for money, but we cannot say the department has maximised the chances that it will be."

A BEIS spokesman said: "Consumers won't pay a penny until Hinkley is built; it will provide clean, reliable electricity powering six million homes and creating more than 26,000 jobs and apprenticeships in the process."