Nuclear energy is no stranger to the ‘grey area’. On the one hand, it represents a statistical dream for those looking to marry sustainability with modern life; capable of maintaining a continuously high output more than capable of meeting the needs of thousands – all at a lower cost than coal or gas, and without any of the harmful consequences of carbon emissions – poses it as something of an ideal solution.
On the other, public perception – and a number of other, less-than-ideal statistics pertaining to cost, health and safety – mean that, for the most part, it remains a highly divisive concept. To all intents and purposes, while nuclear power is capable of reducing the nation’s carbon footprint, it comes at a price many of us are unwilling to pay – particularly when wind, solar, and hydropower (to name just a few) offer sustainability without the risks.
These risks extend from mining the uranium in the first place – a practice which can have devastating consequences for the environment and entire workforces – to the production of nuclear waste, the cost of building and maintaining a nuclear power plant, and, of course, the ongoing threat of a devastating accident. For this reason, energy suppliers like Ecotricity who offer 100% green energy do not source any power from nuclear sites.
Nevertheless, under the government’s current plan for reducing the UK’s carbon emissions, building upon our nuclear energy reserves fits the bill. Unfortunately, a large part of the bill itself is threatening to fall upon UK households, regardless of their supplier.
What is the Government Planning?
As part of the government’s comprehensive push toward a target of Net Zero by 2050, Johnson is eager to lay down the plans for a new nuclear power plant near the village of Sizewell, on England’s eastern coast. This area is already home to two nuclear plants, although only one is currently in operation.
This new plant, which will be known as Sizewell C, will significantly boost the UK’s ability to power homes and businesses without directly contributing to country’s carbon emissions – although, of course, there are plenty of sources claiming that nuclear power is far from ‘low carbon’.
The anticipated construction costs of this new plant total £20 billion, and it has been suggested that a significant portion of this mammoth sum could come from a new surcharge which, if agreed, will appear on household energy bills.
The surcharge, if agreed upon over the coming months, will be applicable to all households, whether they are signed up with a green supplier or not.
One important thing to note here is that this surcharge will fund construction only – not any actual power generated. For any customer, this will no doubt prove frustrating. For those who have purposefully chosen their energy supplier on the basis that their energy will be derived exclusively from clean, safe and renewable sources – and who will, as a result, never stand to benefit from the completion and operation of this new plant – it represents a hollow cash grab.
The situation proves equally as frustrating for those green energy suppliers, with an anonymous energy chief executive stating that, ‘We’ve got to stop seeing customers’ bills as a sort of cash machine for folly projects’, and similar sentiments being made by Kit Dixon of Good Energy, and Dale Vince of Ecotricity.
How Much Will it Cost?
The surcharge will be calculated based upon a regulated asset base financing model, which, while complicated, is not unfamiliar to UK bill payers. It has been utilised in a number of largescale construction projects – most notably, the Thames Tideway sewer, which is anticipated to be completed in 2025.
The big difference? The task of constructing a nuclear power plant is monumentally complex and, as a result, has a tendency to incur much higher costs than developers first envisage. In fact, the developers behind Sizewell C – a French-owned company known in the UK as EDF Energy – recently announced that an additional £2.9 billion would be needed to complete Hinkley Point C nuclear plant, and that the planned completion date would be delayed from 2017 to 2025.
Thus, this latest project from EDF poses a high construction risk. For a private investor, this risk would necessitate some serious pause for thought; for the public, a regulated asset base financing model leaves them no choice but to fund an indefinite project from which they may never benefit.
Also important to consider is the extent to which EDF will lean on bill payers. One of the benefits of the regulated asset base financing model is the fact that, in an ideal scenario, it will attract investors who would otherwise shy away from the project. But, given the fact that numerous other nuclear power plants have been halted due to lack of interest – or, perhaps, confidence – from investors, it seems like an idealistic notion that investors will swoop in and ‘take over’ the project’s funding.
Are There Any Benefits for Bill Payers?
EDF Energy have stated that nuclear could save billions each year – and, naturally, that those reductions would translate to lower energy bills for bill payers. Still, given the time and costs required to complete a project of this size – and EDF’s recent history with similar projects – it will be a long time before bill payers experience any of the proposed savings.
And, while the new plant is expected to power millions of homes for more than sixty years following its completion (at a lower cost than energy derived from fossil fuels), those benefits will only be felt by those who are signed up to an energy supplier still willing to use nuclear power, rather than entirely green and renewable energy sources like solar and wind.
There is, of course, the advantage of a growing emancipation from fossil fuels. Any opportunity to do so carries a significant benefit, but nuclear seems to be an unnecessary step toward carbon neutrality. Given the BEIS’s recent predictions, which stated that solar power offers the most effective solution to mitigating the country’s carbon footprint, investing so much of the tax payer’s money into such a limited solution seems misguided, at best.
Is the Project Going Ahead?
It was announced by Simone Rossi, EDF’s chief exec, that the project simply cannot progress without a new legislation ruling in favour of a regulated asset base financing model. In other words, households must be instructed to saddle the costs, or plans will remain at a standstill.
EDF are keen to begin the project in 2022, which means that they require confirmation on the regulated asset base financing model ASAP.
At this point in time, we cannot be sure whether or not the project will proceed – and, of course, whether we will all be reminded of its progress in our energy bills. Bill payers can sign the Stop Sizewell C Petition online but, for the most part, we can only wait to see whether or not the government is willing to pass this mammoth bill onto UK households, or whether the country will finally embrace the most effective renewable technologies out there with both arms.