Cheap gas and new technology make the Hinkley Point power plant look expensive
David Cameron is about to sign you up to pay for one of the most expensive man-made objects in the world.
The proposed nuclear power station at Hinkley Point in Somerset will cost an estimated £24.5bn, take a decade to construct, and tie British households into an astonishingly expensive electricity subsidies until 2060.
For that price you could pick up eight Queen Elizabeth-class aircraft carriers, build forty Royal London Hospitals, or pay for Crossrail - twice. You could also just about afford another Three Gorges Dam, the 1.5-mile long monstrosity that spans the Yangtze River.
The latter, which required the relocation of about 1.5m people, cost £26bn. But it also produces 22.5 gigawatts of power, more than seven times what Britain's version will generate.
Perhaps unsurprisingly, a growing chorus of critics are calling for the unthinkable: to bin Hinkley Point altogether.
They may have a point. The world has changed dramatically since 2010 when the government named the spot on the Somerset coast as a possible site for new atomic reactors.
In the intervening years, the price of some renewable technologies has plummetted by as much as two-thirds. A deluge of natural gas from America's shale industry has slashed the fuel's cost in half. Last month, entrepreneur Elon Musk unveiled a battery that he said portends an era in which any home with solar panels, and perhaps a rooftop wind turbine, will be its own self-sustaining power plant. The advance, he said, will "fundamentally change the way the world uses energy".
Even if Musk's prediction proves wildly optimistic, the cost of Hinkley has become a problem. Peter Atherton, an analyst at Jefferies and long-time critic was unequivocal: "This project is an abomination," he said. "It's going to cost £16bn to build, plus another £6bn in financing costs. Either of those numbers alone should have made this unthinkable. We're building a power station, not the pyramids."
Before delving deeper into the arguments for and against one of the most expensive projects in Britain's history, a bit of background is necessary.
Two years ago, then energy secretary Ed Davey agreed a financial framework with EDF Energy, the power giant owned by the French state. Under the deal, the government guaranteed EDF would receive £92.50 per megawatt hour produced by Hinkley's twin reactors for 35 years from the start of operation, a rate the French said they needed to cover the huge upfront cost. The tariff will rise every year in line with inflation.
Assuming it meets its 10-year construction timeline and that building begins in earnest next year, EDF will collect just short of £120 per megawatt hour in 2026, its first year of operation. Today the wholesale price is £39 per megawatt hour.
Principal construction has yet to begin because since that 2013 accord, EDF and the government have been locked in talks with a pair of Chinese state companies that have agreed in principle to pay for as much as 40% of the megaproject.
China General Nuclear Power Corp and its rival China National Nuclear want more than just a share of the profits. Beijing is lobbying hard for rights to build a reactor at Bradwell in Essex.
Cameron has choices. He could accede to Chinese demands. Oxford professor and government adviser Dieter Helm said in a recent policy paper that the current approach "makes no sense".
He argued that Cameron should spurn the Chinese and have the government take an equity stake itself. The idea, which has gained currency in some government circles, would fly in the face of the prime minister's repeated pledges to not put any public money into the project.
Yet given the subsidies, which are added to household bills, and £16bn in loan guarantees from the Treasury, this pledge was long ago reduced to an exercise in semantics. Helm said: "Add in the military and security issues of letting Chinese state-owned companies into the heart of the British nuclear industry, and it seems positively perverse to prefer Chinese government money to British government money in so sensitive a national project."
If the Treasury took a stake it could slash financing costs and give taxpayers a piece of a project they would already be bankrolling through energy bills. A source close to the talks said: "EDF can borrow at 7%. The government can borrow at 2%. That could reduce the £92 to something more like £70."
All those arguments assume that Hinkley Point is a good idea. This is far from clear. The attractions of nuclear power are that it produces round-the-clock electricity with no carbon emissions. EDF chief executive Vicent de Rivaz called it "the only guarantee that the UK will have the low-carbon energy it needs".
But the decision to bet on the European Pressurised Reactor (EPR) designed by Areva, another French state-owned developer, looks questionable.
Areva has not sold an EPR since 2007. Its first prototype at Flamanville in France was meant to cost €3bn (£2.1bn) and begin operation by 2012. It is three times over budget. After cracks were found recently in the reactor vessel, the finish date has been pushed to 2017.
Areva lost €4.9bn last year. This month, Paris engineered a partial takeover by EDF. While one French nuclear champion rushes to prop up the other, the energy industry is in a state of profound change.
In the five years since Hinkley became a launchpad for the UK's nuclear renaissance, the cost of solar power panels has plummeted by 67%, according to Bloomberg New Energy Finance. The price of onshore wind turbines has shrunk by 5%,though the government's decision last week to slash subsidies will curtail new developments.
The knock against these technologies is that they are intermittent. But if Musk can bring batteries to the masses, he could unlock their potential as a more dependable, predictable and cheap source of clean electricity.
The idea of betting on cleaner-burning gas as a bridge from coal while renewables and battery technology develop is not nearly as far-fetched an idea as it was even five years ago. Given the pace of change, there is a real risk that Hinkley will come to be seen as a monumental blunder, the most expensive white elephant in British history.