David Cameron could barely hide his glee. In June 2014, the then prime minister welcomed Chinese premier Li Keqiang, who signed a string of trade and investment deals totalling £14 billion. The deal bonanza came a year before the Chinese agreed to pump billions into Hinkley Point C in a move that was meant to revive Britain’s nuclear industry, ushering in a new Sino-British golden era. That vision is long gone and the future of the UK’s nuclear industry is up in the air after reports that the government is exploring ways to remove state-owned China General Nuclear (CGN) from the proposed £20 billion Sizewell C nuclear plant on the Suffolk coast, amid mounting concerns about Beijing’s influence in critical infrastructure projects. If the government removes CGN from Sizewell, the Chinese could pull out of all three, leaving a multibillion-pound black hole in Britain’s nuclear plans. One way in which the government might attract new backers to replace Chinese money would be by introducing a regulated asset base (RAB) funding model. Usually reserved for capital-intensive sectors such as water and energy where monopolies exist, RAB takes the risk away from the developer and piles it on to consumers through higher bills during the construction phase. The RAB model was used to support the Thames Tideway “super sewer”. Steve Thomas, professor of energy policy at Greenwich University, said: “On Hinkley, intuition says it cannot possibly be abandoned now — but all logic says it should be abandoned now. You can’t imagine that after 15 years, the government is going to say, ‘Sorry, we made a mistake with this.’ But the reality is that it will be the most expensive power on the system, so from a consumer point of view, it will be awful.” A paper authored by Thomas with Alison Downes of the pressure group Stop Sizewell C estimated that using the RAB model could pile more than £500 on to household bills during the construction, assuming cost overruns and delays. Sir Ed Davey, the former energy secretary and now Liberal Democrat leader said “Anything that passes nuclear’s costs on to the taxpayer — costs like nuclear waste management, nuclear station decommissioning, or delays and cost overruns — will be a total betrayal of taxpayers and cost every household in Britain a small fortune,” Sources told The Sunday Times that EDF was also keen to eject CGN from Sizewell, as its involvement was becoming a block on securing further investment. Thomas at Greenwich University said: “The problem is going to be finding investors who think the project [Sizewell C] is attractive enough, whilst at the same time not dumping huge amounts of risk on to consumers. And I don’t see how you can square that equation. All the experience in the past 20 years says that costs are going to go horribly over budget and construction times are going to be horribly delayed. Who’s going to take that risk?”
Times 1st Aug 2021 read more »
Ministers have been warned against taking a stake in the Sizewell C nuclear plant in Suffolk amid reports that they are looking to strip out Chinese funding. Sir Ed Davey, the Liberal Democrat leader who as energy secretary in the coalition government helped to broker the nuclear deals with China, said heaping costs on to taxpayers would be “a total betrayal”. The government remains in negotiations with France’s EDF, the lead operator, over how to fund the project and could take an equity stake if state-owned China General Nuclear (CGN) is removed. Ministers are expected to respond to a consultation launched in 2019 on introducing the regulated asset base (RAB) model for Sizewell C, which would pile costs onto consumers and relieve the financial pressure on the operators during the construction phase.
Times 1st Aug 2021 read more »