New UK nuclear financing model could leave taxpayers responsible | Environment

The government will present plans to revive the UK's nuclear ambitions through a new regime that would leave taxpayers responsible for rising costs or delays.

The funding model, expected this week, could help fund multibillion-pound plans to follow EDF Energy's Hinkley Point C project in Somerset, which ministers plan to build on the Sizewell site , in Suffolk.

It could also resurrect the pending plans for a new £ 16 billion nuclear reactor on the Wylfa project in North Wales, which collapsed last year due to high costs of nuclear construction.

Government officials are expected to reveal a new financial framework based on the model used to finance the £ 4.2bn Thames Tideway tunnel.

As part of these plans, the government has authorized super-sewer developers to bill customers for the project and has agreed to cover cost overruns in excess of 30% of the budget and to act as a lender if funding was disappearing.

The nuclear plans should be unveiled before the end of the year parliamentary recess, in parallel with the publication of a white paper on energy.

The roadmap will set out the government's plans for the energy sector as the economy moves closer to the UK target of reducing net zero emissions by 2050.

The industry should have three months to respond to a formal consultation before ministers decide to go ahead with this program.

Senior nuclear industry officials have told government officials and investors that the proposed financial framework, known as the regulated badet model, could result in lower costs for consumers.

The plans would give developers an initial, regulated return on investment at each new phase of the project. This could encourage more investment infrastructure and pension funds and better loan conditions for the developer.

Government officials are under pressure to find a new way to fund nuclear projects after the National Audit Office has condemned the 35-year deal to support the Hinkley Point project through energy bills. A cost of £ 92.50 for each megawatt hour of electricity produced.

The average price of electricity in the UK last year was between 55 and 65 pounds per megawatt hour.

The watchdog accused ministers of having put energy bill payers on a "risky and expensive" project offering "uncertain strategic and economic benefits".

The new financing plan has already raised fears that applying the Tideway model to a £ 20 billion nuclear project that would take about a decade to build could expose taxpayers to a much higher financial risk.

Nuclear projects have suffered significant delays and cost overruns of several billion pounds in recent years, making them almost impossible to finance without state intervention.

EDF announced last month that its troubled French nuclear project in Flamanville could be delayed by three years to repair eight defective welds found on the site.

The latest delay could raise the start date of Flamanville, initially in 2012, to 2022. The project was to cost about 3 billion euros at the beginning of construction, but the latest estimates badume a cost close to 11 billion euros. euros.

EDF Energy submitted that the risk to the taxpayer of financing its Sizewell B project would be much lower, since it is a copy of the same model used to build Hinkley Point C.

EDF has stated that Sizewell's costs could be reduced by one-fifth compared to those of Hinkley Point.

The Sizewell project could even be competitive with the cost of wind power at sea, according to the company, after taking into account the cost of saving the wind farms when the wind was not blowing.

On an autonomous basis, nuclear electricity would cost more than wind and solar projects.