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Uncertain funding for Britain’s plans for new nuclear reactors

China General Nuclear has provided substantial investment for Britain’s
nuclear power stations alongside France’s EDF. The two companies are
funding Hinkley Point C in Somerset but the project has been beset by cost
overruns and delays.

EDF is expected to announce more delays to Hinkley C
within weeks and will have to raise billions in extra finance for the
project. The company has warned CGN is not likely to increase its funding
for the plant.

Ministers have drawn up a so-called Regulated Asset Base
funding model to replace Chinese investment for nuclear plants in future
and incentivise other private investors to put forward funding. The RAB
model would see consumers start paying indirectly towards the costs of a
new power project during the construction phase. They would fund the
project through a small rise in their energy bills.

The model replaces the current Contracts for Difference scheme used for Hinkley Point C whereby
the developer finances the construction phase and only receives revenue
when the plant generates electricity.

EDF has also warned that separate
plans to build the Bradwell nuclear power plant in Essex are likely to fall
through because of political opposition to Chinese investment. In its
annual report, EDF said: “There is great uncertainty around the
development perspectives of the Bradwell Project, mainly related to the
political opposition to a Chinese company leading a critical UK
infrastructure project and from the lack of local stakeholder support.
““The risks of not being in a position to carry out the Bradwell project
are high and have increased in 2021.”

The government is also exploring
options for squeezing China out of the plans to build the Sizewell C plant
in Suffolk.

 Telegraph 13th May 2022

https://www.telegraph.co.uk/business/2022/05/13/energy-bills-rise-pay-nuclear-plants-says-kwarteng/

May 16, 2022 - Posted by | business and costs, UK

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