Australian news, and some related international items

UK: Nuclear energy plans contain a ticking time bomb for our bills

The Government’s nuclear plans create incentives for nuclear power companies to overcharge consumers, by linking prices to the firms’ own claims about costs, and by taking a stake in the outcome.

The UK intends to fund new nuclear, starting with Sizewell C, through a charge on power
bills, paying out to companies while the projects are being built (potentially 13-17 years), and recouping that money later, if possible, by reducing any further subsidy on generation.

It is a similar model to renewables, bar that those payments are only made after the power is being delivered. That difference means the capital risk of project failure is transferred from the nuclear developers to the public, putting up bills.

The Government claim this ‘Regulated Asset Base’ method of financing saves money, by comparing the scheme to the very expensive and privately financed scheme for Hinkley Point C. But the latter is simply a waste of money not a credible benchmark.

The Government is consulting on the model’s detail but has made it clear that level of payments will reflect costs estimated by the company, not any value-for-money target, which again
transfers the risk of overspending to the public.

 Institute of Economic Affairs 16th June 2022


June 18, 2022 - Posted by | Uncategorized

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: