Gone fission: £16bn power industry landmark

The Government faced criticism, however, over the £92.50 per megawatt hour that will be paid for electricity produced at Hinkley Point C, in Somerset – around double the current market rate.

And shortly after the go-ahead was revealed, energy giant Npower announced its electricity and gas prices will jump by 9.3 per cent and 11.1 per cent, respectively, from December. The rise was immediately seized on by Labour leader Ed Miliband who said it underlined the need for a price freeze in the energy market.

“Neither the energy companies, nor the Government want Labour’s price freeze because they are content for prices to carry on rising at 10 per cent a year,” he said. “The reason prices are going up is because you’ve got a broken market and you’ve got companies that are overcharging people. That’s why we need to take action.”

Prime Minister David Cameron dismissed Labour’s pledge as a “con” and highlighted benefits of a nuclear strategy. The Government predicts Hinkley Point C, coupled with the prospect of other new nuclear sites, could reduce bills by an average of £77 a year.

Npower’s 10 per cent average bill increase will affect about 3.1 million customers and follows recent price hikes by British Gas and SSE.

The price hike will mean an average dual fuel customer’s bill rises by £137 a year, from £1,323 to £1,459. Npower also raised tariffs by 8.9 per cent last November.

Mark Todd, director of price comparison service energyhelpline, said: “This is devastating news and is proof to cash-strapped consumers that customer loyalty reaps no benefits.”