Kwasi Kwarteng, Business, Energy, and Industrial Strategy Secretary of the United Kingdom, has reportedly revealed new funding regulations that will open up a path to build a major new nuclear power station.
The latest move is the most recent effort from the UK government to get the Suffolk-based £20 billion Sizewell C project running.
The proposed facility is still awaiting approval for the planning, but the Treasury has been unsure how to pay for it up to this point. Apparently, the project is facing tremendous opposition in the community even if it gets approved.
The government claims that the new funding model will assist in lowering the cost of future nuclear power stations in the UK, sparing consumers more than £30 billion on every new large-scale plant.
As per the proposal, electricity consumers would be required to pay a portion of the costs of nuclear power plants in advance through their bills.
RAB (Regulated Asset Base) is the supposed new model that has already been utilized to fund a couple of significant infrastructure projects, notably the £4.2 billion Thames Tideway ‘super-sewer.’
It enables investors to get payments before the operations are finished. The Treasury, on the other hand, was first hesitant to use the RAB approach.
The new model not only raises customer bills over the duration of the project but also exposes them to the risk of cost overruns, something that has plagued nuclear projects in the past.
The Nuclear Industry Association stated that it will collect a minimal fee on bills, no more than a few pounds during the initial stages of the project and less than £1 per month for the duration of the project.
The association ‘warmly received’ the initiative, noting that it would save £526 million per year in emissions of CO2, or £18 per year for each UK home, at today's carbon prices.
However, the proposal is disruptive due to the high cost of large nuclear units and the falling cost of alternatives such as offshore wind.
Source credit: https://www.bbc.co.uk/news/business-59051025