Households will reportedly soon see their energy bills hiked in order to pay for the construction of new nuclear power plants in the UK. Ministers are in the process of drawing up legislation that will allow the construction of the new £20bn Sizewell C plant in Suffolk through the use of a Regulated Asset Base (RAB) financing scheme, FT reported.
At its core, the RAB model, which is already used in the UK for large infrastructure projects like Thames Tideway, would allow builders to bill the eventual users of the plant’s energy during the construction phase.
By using such a surcharge, which would be set at an agreed level, the project would find it easier to attract more investors to the project, the logic goes.
The government launched a consultation of the funding method back in 2019. Today, the Department for Business, Energy, and Industrial Strategy (BEIS) said that it was still evaluating the RAB model.
The proposed new plant at Sizewell will have 3.2 gigawatts of electricity generation capacity, enough to power more than 6m households for six decades.
The report comes amid growing concerns over the future of the UK’s nuclear fleet, with all but one of the existing reactors set to be decommissioning come 2030.
Thus far, just new one plant, Hinkley Point C in Somerset, is under construction, leading MPs to demand that the government commit to 10 gigawatts of new nuclear by 2030.
That’s in line with the recommendations of the government’s climate advisers the Committee on Climate Change (CCC).
A BEIS spokesperson said: “New nuclear will play a crucial part in this government’s plans to achieve a secure, low-carbon, affordable energy future.
“As stated in our recent consultation, the Government is continuing to explore a Regulated Asset Base (RAB) funding model with nuclear project developers, and believe that it remains a credible option with the potential to help secure private investment, and cost consumers less in energy bills long term.
“We will continue to evaluate the RAB, alongside other delivery models, and have always been clear that any new nuclear project must provide value for money for consumers and taxpayers.”
By City AM
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