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Monday, July 15, 2019

One rule for nuclear.....

The Guardian reports that the government is to set out plans to resuscitate the UK’s struggling nuclear ambitions with a new scheme which would leave taxpayers liable for rising costs or delays.

They say that the funding model, expected this week, could help bankroll the multibillion pound plans for a follow-on to EDF Energy’s Hinkley Point C project in Somerset, which ministers aim to build at the Sizewell site in Suffolk.

It could also resurrect the dormant plans for a £16bn new nuclear reactor at the Wylfa project in North Wales, which fell apart last year due to the high costs of nuclear construction:

Senior nuclear industry sources have told government officials and investors that the proposed finance framework, known as a regulated asset base (RAB) model, could lead to lower costs for consumers.

The plans would hand developers an upfront regulated return on their investment at each new phase of the project. This could encourage more investment from infrastructure and pension funds and better borrowing terms for the developer.

Government officials are under pressure to find a new way to finance nuclear projects after the National Audit Office condemned the 35-year deal to support the Hinkley Point project through energy bills at a cost of £92.50 for every megawatt-hour of electricity it produces.

The average electricity price in the UK last year was between £55 and £65 per megawatt-hour.

The watchdog accused ministers of putting energy bill payers on the hook for a “risky and expensive” project which offers “uncertain strategic and economic benefits”.

The new financing plan has already raised concerns that applying the Tideway model to a nuclear project that costs £20bn and takes around a decade to build could leave taxpayers exposed to a far higher financial risk.

Nuclear projects have suffered high-profile delays and multibillion-pound cost overruns in recent years, making them almost impossible to finance without state intervention.

What is particularly interesting about this model is that it does not appear to apply to other energy projects. In particular, the tidal lagoon planned for Swansea Bay was rejected by the UK Government as too expensive, and yet if this model was applied to it, then it and many others would be built, making a significant contribution to tackling climate change.
Spot on Peter.
There is a total blind spot in this government about alternative fuel sources, conveniently labelled 'Green Crap' by too many Tories. Never mind the problem of nuclear waste, most of the current government will be dead by the time that becomes a problem.
Let's hope the current Brexit impasse leads to a Lib Dem Government. At least on. green energy we know it will do the right thing.
There are clearly people in government who do not want to lose face by admitting that the three nuclear power schemes they backed which you cite are not viable without huge taxpayer and consumer support. Moreover, there are better nuclear options - such as that proposed by Rolls-Royce - even if one has to rely on nuclear for baseload electricity.

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