Recommendation 13

A review commissioned by the Department during the negotiations suggested that the £100 million potential fee might not be enough incentive for EDFE to place greater focus on the AGR stations given the potential value of its other UK interests.20 We therefore queried whether the £100 million financial incentive was sufficient to incentivise EDFE, in particular to facilitate smooth station transfers where a maximum of £14 million is available.21 The Department told us that the £100 million incentive was a meaningful financial risk for EDFE. It acknowledged that the incentive might not be large compared to the billions of pounds at stake, but argued it was reasonable in incentivising station- level performance. The Department explained that it had split the £100 million incentive with £30 million for overall fleet performance and £70 million for individual stations, which followed advice it had received from its independent review which suggested that a substantial proportion of the incentive be directed at delivering station-level targets.22