The Government has launched a consultation on a new way of funding new nuclear projects. This “Regulated Asset Base” model is already widely used for UK infrastructure. If applied to Sizewell C, it would lead to lower financing costs and significant savings for consumers.
The consultation states clearly that the Government believes more new nuclear is needed to ensure a low cost, stable, reliable, low carbon system. That means that, alongside a large expansion of renewables, reliable nuclear power will help us switch away from polluting fossil fuels and it cut the cost of decarbonising the electricity supply we all use and depend on. You can read more about the consultation here.
Making Sizewell C a near replica of Hinkley Point C is the key to lowering finance and construction costs. The know-how of experienced engineers, contractors and suppliers, and a fixed and proven design, reduces the risk to budget and schedule. Much of the cost of design and regulatory certification need not be repeated. The consultation document explains that Sizewell C will benefit from other EPR projects which are already in operation and the experience of Hinkley Point C, which is on schedule. This “second of a kind” opportunity for the UK EPR is unique to Sizewell C. The Government consultation announcement also said that the success of J0 at Hinkley Point C has helped build confidence in new nuclear.
The Regulated Asset Base (RAB) is not new for Sizewell C and has already been successfully used to finance large infrastructure in the UK, such as the Thames Tideway Tunnel – London’s “super-sewer” – as well as electricity, gas, telecoms and transport infrastructure. The RAB model allows investors, such as pension funds, to invest in projects because they receive a steady and regulated return. Consumers’ interests are protected by the regulator.
Plans for Sizewell C are progressing with the 4th Stage of Public Consultation, which began last week (further information can be found here). The project offers an enormous opportunity for skills and jobs in the East of England. Hinkley Point C shows what can be expected. Thousands of people, many of them young, are now in employment and training. Meanwhile, industry across the whole UK is developing new capacity and global experience which will help strengthen the UK economy.