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UK public kept in the dark on household costs in paying for nuclear reactors before they’re built

it is somewhat dubious to replace a very expensive form of subsidy with one that promises to be merely expensive — and then claim that you have ‘saved’ money.

How much longer is the government going to suppress the cost to households of achieving net zero carbon emissions, or try to imply, as business secretary Kwasi Kwarteng recently seemed to imply on the Today programme, that it won’t cost us at all?

Even as he spoke Kwarteng was working on a new model for the funding of nuclear power stations that was unveiled yesterday in the form of the Nuclear Energy Finance Bill. The proposed legislation will impose levies on energy bills in order to subsidise the construction of new nuclear power stations. The new model of funding — called Regulated Asset Base — will replace the model by which Hinkley C is being constructed: the contracts for difference, or CfD, model which was used to entice EDF to undertake the project.

The carrot is a guaranteed ‘strike’ price for electricity generated by the plant as soon as it starts generating electricity. Funding plants upfront may have the agreeable effect of cutting out Chinese finance. Moreover, the CfD model was failing to attract investors for other projects, such as the proposed new nuclear reactor at Wylfa, which Hitachi abandoned a year ago.

But it will inevitably transfer risk to the consumer — should, say, the proposed new plant at Sizewell in Suffolk end up being abandoned before it begins generating power, taxpayers will already have paid towards the plant
through their bills. Transferring that risk to the private sector was the whole reason for introducing the Hinkley form of funding in the first place.

We don’t yet know how big the sting will be to energy consumers to finance Sizewell C through the new funding model — the Department for Business insists it will be ‘a few pounds a year’ per household during
the early construction phases, followed by ‘less than £1 a month’ during the full construction phase. But it is somewhat dubious to replace a very expensive form of subsidy with one that promises to be merely
expensive — and then claim that you have ‘saved’ money.

 Spectator 27th Oct 2021

 https://www.spectator.co.uk/article/who-should-pay-for-nuclear-

October 30, 2021 - Posted by | politics, UK

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