New finance model to help cut the cost of new nuclear power projects in Britain, saving consumers more than £30 billion on each new large-scale station; legislation will encourage a wider range of private investment into new nuclear projects, reducing Britain’s reliance on overseas developers for financing new nuclear projects; large scale nuclear power is the only technology available to provide continuous, low carbon electricity and has key role to play in reducing UK’s dependency on fossil fuels and exposure to volatile global gas prices.
BEIS 26th Oct 2021 read more »
The Nuclear Energy (Financing) Bill will introduce a Regulated Asset Base (RAB) model as an option to fund future nuclear projects. A RAB model is a tried and tested method, typically used in the UK, to finance large scale infrastructure assets such as water, gas and electricity networks. Under this model a company receives a licence from an economic regulator to charge a regulated price to consumers in exchange for providing the infrastructure in question. The model enables investors to share some of the project’s construction and operating risks with consumers, significantly lowering the cost of capital which is the main driver of a nuclear project’s cost to consumers.
BEIS 26th Oct 2021 read more »
Plans to impose a levy on electricity bills to help pay for a proposed new nuclear power station on the Suffolk coast have been slammed as “desperate”, by campaigners. However, EDF, which has submitted plans for the Sizewell C station, says the proposed funding model presents a “big step forward” and will enable it to pay for the construction of the project. The plans known as RAB (regulated asset base) would act as a levy on household electricity bills. It is designed to encourage investment to replace Great Britain’s fast-ageing stock of nuclear plants, which currently supply around 16% of the country’s electricity. The model echoes those used in the construction of Heathrow’s Terminal Five and the Thames Tideway Tunnel.
East Anglian Daily Times 26th Oct 2021 read more »
Funding rules paving the way for a new major nuclear power station have been announced by the Business and Energy Secretary, Kwasi Kwarteng. The move is the latest stage in efforts to build the £20bn Sizewell C project in Suffolk. The proposed plant is still subject to planning approval, but until now, the Treasury has been uncertain of how to pay for it. Even if the project is approved, it still faces strong local objections. The government said the new financing model could help cut the cost of new nuclear power projects in Britain, saving consumers more than £30bn on each new large-scale station. The proposals include electricity customers paying for part of nuclear schemes’ costs upfront through bills. The new model, known as RAB (Regulated Asset Base), has already been used to finance some large infrastructure projects, including the £4.2bn Thames Tideway “super-sewer”. It allows investors to receive returns before the projects have been completed.
BBC 26th Oct 2021 read more »
Stop Sizewell C denounces the government’s announcement today of legislation for a new tax on consumer energy bills to help build nuclear power stations such as Sizewell C. The Regulated Asset Base (RAB) model would transfer substantial upfront costs, and considerable risk, onto consumers already struggling with rising energy bills and other tax increases. Developer EDF Energy estimates Sizewell C – which does not have planning consent and may never get it – would cost at least £20 billion and has made no secret that the project could not proceed without a RAB. The announcement is clearly earmarked for large-scale nuclear projects, as Rolls Royce says it doesn’t anticipate using RAB for Small Modular Reactors. The government is moving with extreme haste, with the second reading of the bill tomorrow.
Stop Sizewell C 26th Oct 2021 read more »
UK to shut out China with revamped nuclear funding model. Britain’s terrible nuclear energy program has been restarted with a new funding model that will allow consumers to move costs forward on invoices as ministers aim to attract new investors and keep Chinese companies out. Kwasi Kwartang, Business Secretary, wants to attract investors from the United Kingdom, the United States and elsewhere before the country’s existing reactors retire by 2035. Kwasi only said he wanted to reduce “dependence on Britain’s foreign developers,” but Tory lawmakers believe the new model will help remove China’s CGN from future energy projects. The Nuclear Financing Bill uses a financing model known as Regulated Asset Base (RAB)Used for other infrastructure projects such as Heathrow Airport Terminal 5 and Thames Tideway Tunnel. Under this plan, consumers will contribute in advance to the cost of new nuclear power projects during the construction phase.
FT 26th Oct 2021 read more »
Responding to the Government’s announcement on new finance model to fund new nuclear power stations, Energy UK’s chief executive Emma Pinchbeck said: “Nuclear will play an important role in the mix as we look to fully decarbonise the power sector, as we know that the cheapest route to a secure, affordable energy system is one where we use all the low carbon technologies we have available.” “We have been calling for certainty for new large scale nuclear and welcome the Government’s announcement today. At the same time, it will be important that the Government looks at a fair and consistent way of allocating the costs and benefits of supporting all low carbon technologies for the public, in its forthcoming affordability review.”
Energy UK 26th Oct 2021 read more »
“Agreeing a new financing model for new nuclear power is a crucial step in building a secure, affordable and greener energy system in the years ahead. “The RAB model has been used successfully across UK infrastructure and has the potential to secure backing from a wide range of investors. Getting new projects off the ground will be a huge boost to supply chains and can deliver jobs right across the UK.”
CBI 26th Oct 2021 read more »
Government touts RAB funding model as ‘win-win’ for climate and consumers, but pushing upfront costs onto energy bills could prove controversial. UK consumers are set to pay up-front for the construction of a fresh fleet of large-scale nuclear power plants through their energy bills under a new financing model unveiled by the government today, which looks set to provide a key building block of its plans to deliver a net zero energy system. The government described the new nuclear financing plan as a “win-win” that would help de-risk and therefore encourage more private investment, while also cutting costs for businesses and consumers, helping decarbonise the power grid, and boosting jobs and growth in the sector. It plans to table fresh legislation – a Nuclear Energy (Financing) Bill – that would be based on a model known as the Regulated Asset Base (RAB), which it said would reduce reliance on overseas developers and provide greater certainty to investors.
Business Green 26th Oct 2021 read more »
In response to Greg Hands announcing that the government would pursue a Regulated Asset Base (RAB) funding mechanism for new nuclear reactors, Dr Doug Parr, Chief Scientist for Greenpeace UK, said: “The funding model that EDF has been lobbying hard for to pay for their expensive nuclear power plants has already been tested in the USA. The results were disastrous. It transfers huge financial risk from the builders to bill payers. In South Carolina, 18% of residents’ energy bills went to pay for a half-built reactor which has been abandoned and will never produce electricity. This government has not learnt the lesson that new nuclear power can’t deliver electricity on schedule or for an affordable price for consumers, and so its fascination with new nuclear will become a hindrance to climate action, not a help. The government should be focusing on expanding renewables power at greater speed and scale than their current ambition, with a smart grid, home insulation and storage capable of providing the UK with a clean, secure energy system without bankrupting bill-payers.”
Greenpeace 26th Oct 2021 read more »
The government plans to resuscitate the UK’s nuclear energy ambitions by creating a financing model that could pile part of the upfront cost of the £20bn Sizewell C power plant on to householders’ energy bills before it starts generating electricity. The energy secretary, Kwasi Kwarteng, set out legislation on Tuesday that would share the early construction costs with consumers, with the aim of reducing the UK’s reliance on overseas funding for nuclear projects by making them more attractive to domestic investors. The long-awaited legislation could also pave the way for the government to take a direct stake in the Sizewell C nuclear plant by using tens of millions of pounds of public money during its risky development phase – replacing the China General Nuclear Power Group (CGN), which has a 20% share of the project.
Guardian 26th Oct 2021 read more »
China may be squeezed out of UK nuclear projects under new deal. Energy firms building new plants will be allowed to pass on costs to consumers before construction is completed under new plans. Boris Johnson’s Government moved to end the use of Chinese state companies to fund new nuclear power plants in the UK on Tuesday by announcing a change in approach to financing. Energy firms building new plants will be allowed to pass on costs to consumers before construction is completed in a break with precedent, increasing incentives to invest. Government ministers hope the legal change will bring in a wave of funding in nuclear energy from British pension funds, insurers and investors from America and other international allies. The move was interpreted as an attempt to force the Chinese state-owned company China General Nuclear Power Group (CGN) from building the proposed Sizewell C plant in Suffolk. Preparations for the plant have been running for years and CGN has a 20 per cent stake in the project led by France’s power giant EDF, which is at the fund-raising and development stage.
Telegraph 26th Oct 2021 read more »
Ministers moved yesterday to cut China out of involvement in Britain’s nuclear power sector with a new funding model that will place the risk of future projects on to consumers. Under plans announced by Kwasi Kwarteng, the business secretary, investors in new nuclear power stations will see a return on their money before the plants are even built. The move will effectively mean that consumers take on the risk of delays and cost overruns to projects and will start paying for the new plants through their bills before the reactors are built.
Times 27th Oct 2021 read more »
China to be cut out of Sizewell C plant in new move to fund nuclear power. Consumers will pay £1-a-month extra on energy bills during a power plant’s construction to reduce reliance on foreign firms. It effectively means British consumers taking on the risk during construction and paying an extra £1 on their energy bills every month in the short-to-medium term. But officials estimate the new model will mean a £30bn lower overall cost of financing nuclear power because the Government will not have to incentivise overseas companies to take on all the risk while a plant is being built. This will amount to a saving of more than £10 per year on an average domestic dual fuel bill throughout the 60-year life of a nuclear power station
iNews 26th Oct 2021 read more »
Evening Standard 26th Oct 2021 read more »
Energy Live News 26th Oct 2021 read more »
Daily Mail 26th Oct 2021 read more »
The government is looking to adopt the finance mechanism used to pay for the Thames Tideway super sewer to rescue plans to construct more nuclear power plants. The Nuclear Energy (Financing) Bill, currently in Parliament, will have a new section added to introduce a regulated asset base (RAB) model as an option to fund future nuclear projects. Under this model a company receives a licence to charge a regulated price to consumers. The model enables investors to share some of the project’s construction and operating risks with consumers, lowering the cost of capital.
Construction Index 27th Oct 2021 read more »
New Civil Engineer 26th Oct 2021 read more »
Nuclear building plan shifts financing on to consumer.
Daily Business 26th Oct 2021 read more »
GMB, the energy union, has welcomed the funding model for projects such as the Sizewell C nuclear power station today in principle and called on MPs and Government to get on with delivering the next generation of nuclear power.
GMB 26th Oct 2021 read more »