Government Commits to Nuclear for Net Zero

On Tuesday, Business Secretary Kwasi Kwarteng set out ‘a new funding model to attract a wider range of private investment into nuclear power projects’

The Nuclear Energy (Financing) Bill will use a Regulated Asset Base (RAB) model to fund future nuclear projects in the UK – a tried and tested method that successfully financed infrastructure projects, such as the Thames Tideway Tunnel and Heathrow Terminal 5.

The RAB model gives investors greater certainty through a lower and more reliable rate of return in the early stages of a project, lowering the cost of financing, and ultimately helping reduce consumer bills.

Business Secretary Kwasi Kwarteng, said: “Our new model is a win-win for nuclear in our country. Not only will we be able to encourage a greater diversity of private investment, but this will ultimately lower the cost of financing new nuclear power and reduce the costs to consumers and businesses.”

This announcement was followed by the Autumn Spending Review, which committed “£1.7 billion to enable a final investment decision for a large-scale nuclear project in this Parliament, and the government remains in active negotiations with EDF over the Sizewell C project.”

A government commitment to invest directly in large scale nuclear coupled with the new RAB mechanism for attracting a wider range of private investment are major milestones in financing and then building new large scale nuclear in Britain.
 
Sizewell C is the only new nuclear project ready to start construction and deliver on this commitment.  Since December 2020, we have been in negotiations with Government and discussions are progressing well.

Business Secretary Kwasi Kwarteng, said: “..we’re also determined to bring at least one large-scale nuclear project to a final investment decision this Parliament.”

The Government’s Net Zero Strategy and Roadmap to Sustainable Investing also put nuclear at the centre of the UK’s net zero ambitions. Specifically, the roadmap gave a strong indication that nuclear will be included in the UK sustainable taxonomy.

The Roadmap to Sustainable Investing establishes an Energy Working Group which gave a strong indication for the inclusion of nuclear in the Sustainable Investing Taxonomy.  The paper included:

“Nuclear power – as a low carbon technology – represents a crucial element of the government’s plans to reach net zero. It has a clear basis for making a ‘substantial contribution’ to the Taxonomy’s objective of climate change mitigation.”

With increasing commitment from Government in nuclear, YouGov has conducted a survey to understand public opinion.  The vast majority of people in Britain support new nuclear with very few people opposed.  The public recognise that nuclear has a key role to play in our energy system. New YouGov poll finds 65% of people in the UK believe nuclear has a role to play in reducing carbon emissions.

MP Mark Jenkinson said: “Nuclear power has quietly been the backbone of the grid for the last few decades, supplying 20% of the UK’s energy needs regardless of the price of gas, the health of our interconnectors or the”

The Sizewell C project is developing a roadshow of events with Government
 
These events will highlight the Environmental, Social and Governance aspects of nuclear, in addition to the importance of nuclear in achieving Government’s ambition to reach net zero by 2050 and level up the country.
 
It is also arranging further site visits to Hinkley Point C and Sizewell B. Please get in touch if you are interested in joining.