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Investors keen on renewable energy, while UK govt is trapping consumers into paying upfront for nuclear power plants to be built in a decade or more

Gordon Murray: LESLEY Riddoch’s article (The National, March 10)
is eminently sensible. The UK Government wants to build more large nuclear
plants such as Hinkley Point C. The problem for Boris is that investors are
not interested.

Centrica abandoned its plans to build new nuclear, Toshiba
exited the giant 3.3GW plant at Moorside, Cumbria and Hitachi scrapped the
£16 billion Wylfa plant on Anglesey. The current Hinkley development costs
are a whopping £23bn, almost double that projected in 2008 and set to rise

The smart money is now with renewables where the returns are
higher, more immediate and less risky. Notwithstanding these setbacks, the
Conservative government, backed by Labour, is determined to plough on with
Sizewell C.

Their problem is who is going to fund it. The Government is not
keen to involve the Chinese who already get a return of 15% on their
investment at Hinckley Point C.

The Business Secretary Kwasi Kwarteng’s
answer is the Regulated Asset Base (RAB) funding model whereby consumers,
that’s us, will pay the construction costs by increasing energy bills. It
is a fanciful type of nuclear subsidy where consumers pay for and
underwrite the construction costs for 10 years before a single watt of
power has been generated.

You have not misread this! The Government is set
to increase our energy bills even further at a time when gas/energy prices
are soaring, pushing even more people into fuel poverty. Perhaps their
spirits will be raised when they learn that RAB, according to Kwarteng,
will give private investors greater certainty through a lower and more
reliable rate of return.

An added bonus is that bill payers can expect
their bills to rise even further when the project is completed since we can
expect the energy strike price for nuclear to be twice that of renewable
– the cheapest form of electricity generation that is now subsidy
free-where consumers only start paying once they start to generate.

TheSmall Modular Reactor programme promises lower energy production costs but
there is no hard evidence to support this claim. What we will get for
certain is large numbers of these power plants spread all over the country
that will raise safety concerns over proliferation of nuclear materials and
terrorist attacks.

 The National 12th March 2022


March 14, 2022 - Posted by | business and costs, politics, UK

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