Published Monday, 21 October 2013
The announcment was made on Monday morning, (© UTV)
The agreement with French-owned EDF Energy will see Hinkley Point C in Somerset begin operating in 2023.
But critics warn householders' bills could rise - as the firm will be guaranteed a price for the electricity produced at around double the current market rate.
The contract is due to run for 35 years, with the electric price increasing annually in line with CPI inflation.
The major announcement comes with energy policy high on the agenda after the Big Six power firms began unveiling hikes of more than 9% in electricity and gas prices.
Margaret Ritchie, SDLP MP for South Down, has put her name to an Early Day Motion objecting to the Hinkley Point plant, and says she will continue to make her concerns known to the Department of Energy and Climate Change.
"Any such facility is likely to be extremely expensive and will leave a potential environmental hazard.
She continued: "The reality is that the UK Government will be agreeing to buy electricity from Hinkley Point for 35-40 years with the tax payer picking up the bill.
"Hinkley Point will add to consumers' bills. We must not jeopardise investment in truly renewable energy by pursuing the fool's gold that is nuclear. "
However, Prime Minister David Cameron said that it was an important day for Britain.
"As part of our plan to help Britain succeed, after months of negotiation, today we have a deal for the first nuclear power station in a generation to be built in Britain.
"This deal means £16 billion of investment coming into the country and the creation of 25,000 jobs, which is brilliant news for the South West and for the country as a whole.
"As we compete in the tough global race, this underlines the confidence there is in Britain and makes clear that we are very much open for business.
"This also marks the next generation of nuclear power in Britain, which has an important part to play in contributing to our future energy needs and our longer term security of supply".
Hinkley Point C will be the first new nuclear power station to be built since Sizewell B in Suffolk, which started generating electricity in 1995.
The Government said building a new fleet of nuclear power stations could reduce bills by more than £75 a year in 2030.
It is understood that China General Nuclear Power Group and China National Nuclear Corporation will be investing in the estimated £14 billion scheme.
The initial commercial agreement is not legally binding until EU clearance has been secured for the state aid. A final contract is expected to be signed next year.
In May, the National Trust for Ireland, An Taisce, launched judicial review proceedings to challenge the legal compliance of the decision to allow the nuclear power plant to operate.
They argue the Irish public was not consulted "despite the nuclear power plant being nearer to the coast of Ireland than it is to Leeds".
The case is due to be heard at the High Court in London in early December.
© UTV News