Dalton reports that French state utility (EDF) is in “a race against time” to secure a funding deal for its proposed Sizewell C nuclear power station in Suffolk as delays risk making the project prohibitively expensive, The Times reported. According to the London-based newspaper the French energy giant has hired Rothschild as financial adviser for the project to build a new EPR unit and says it wants a “definitive way forward” from the government this year so it can start construction in 2022.
The company, which is building two new EPRs at the Hinkley Point C station in Somerset, has said it can significantly reduce the cost of a new plant in Suffolk, including by transferring workers and equipment between the two. The Times said delays to funding that result in a hiatus between the projects would erode such savings and jeopardize Sizewell C, which the government has said must be cheaper than Hinkley.
The British government said last year that new nuclear plants could be rolled out under a new financing model and government investment to decarbonize the UK’s energy sector. The government set out proposals to explore the use of the regulated asset base (RAB) approach to attract “significant private investment” for future nuclear power in the UK. The new funding structure could be used for Sizewell C, which was left in doubt after criticism of the costs surrounding Hinkley Point C.
As a near replica of Hinkley Point C, Sizewell C will be cheaper to construct and finance, EDF Energy said. It will benefit from the experience of Hinkley Point C’s engineers, contractors and suppliers and lessons from other nuclear projects, including operational EPR plants. Hinkley Point C, scheduled to begin commercial operation in 2025, is Britain’s first new nuclear power station in a generation.
Successive governments have backed the idea of a series of new nuclear plants to replace existing reactors that are soon to close. However, projects at Moorside in Cumbria and Wylfa on Anglesey have both been abandoned due to funding problems, leaving Sizewell C as the only other project close to being built. Hinkley Point C was approved in 2016 at a cost of £18bn but this has since risen, first to £19.6bn and then to £21.5bn-£22.5bn, with EDF admitting that it could be delayed. Before the latest cost increase EDF said construction costs for Sizewell C could be about 20% lower than for Hinkley, thanks to the benefit of duplication.
In an associated report, Dalton also relayed that consumers could pay significantly less for electricity from future nuclear power stations as a result of a new approach to funding being proposed by the UK government, according the Nuclear Industry Association. The regulated asset base (RAB) funding method, which is the subject of a government consultation, encourages investment into major infrastructure projects by delivering reliable returns, at a reduced rate, before a plant is operational, the London-based industry group said. “This reduces the need for large-scale, long-term borrowing at high interest rates, which significantly increases the cost of power.” The RAB approach is widely used internationally and has attracted investors for the construction of UK infrastructure projects including the Thames Tideway Tunnel and the Heathrow Terminal 5. The consultation also sought views on the regulation of nuclear projects seeking RAB funding. NIA chief executive officer Tom Greatrex said new nuclear power stations are urgently needed for the UK to reach its goal of net zero carbon emissions by 2050.
“Wind, solar, and other zero-carbon renewables have an important part to play, but nuclear can provide the high volumes of constantly available, reliable, clean power that’s needed as a complement.” Mr Greatrex said the Committee on Climate Change has advised that to reach net zero by 2050 – as legislated by the UK government – that 38% of the country’s power generation needs to come from “firm” low-carbon power like nuclear. Nuclear currently provides about 17% of the country’s electricity production.
By 2030, all but one of the UK’s current nuclear fleet will retire. “Without replacing this capacity, there will be a significant reduction in our ability to reduce carbon emissions,” Mr Greatrex said.
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