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TThe government's new funding model, which is at the heart of its nuclear renaissance plan, is an improvement since an agreement was reached three years ago to support Hinkley Point C in Somerset. This is what can be said best for the new strategy described by officials at a consultation last week. This is also a very low praise.
EDF Energy's agreement to build Hinkley Point C, the first new British nuclear power station in a generation, has been dubbed the most expensive power station of all time, a "white elephant" in a changing energy landscape and a risky gamble and costly taxpayer money.
It was unlikely that such a politically unpleasant deal could be repeated for EDF's later project at Sizewell B. Instead, officials returned to the drawing board to rearrange a framework. funding of billions of pounds that could help reduce the costs that make people cry. of the construction of a nuclear reactor.
The Hinkley Point C project, worth £ 20 billion, will cost taxpayers £ 92.50 in energy bills for every megawatt hour of electricity produced for 35 years. This price is well above the wholesale energy price in the United Kingdom, around £ 55 per megawatt hour, and the new generation of offshore wind farms.
The new funding model promises to reduce by a fifth the cost of building a new nuclear power plant – but this also has a cost. The government's plans to make nuclear affordable means that the British will be twice as likely to build new nuclear reactors.
First, by first paying the reactors with energy bills to finance their construction. Secondly, by taking care of the cost of any overtaking or delay of construction thanks to a guarantee of the taxpayers. Public funds would also compensate nuclear investors if the project was abandoned.
This is the same model used to finance London's super-sewer project, the £ 4.2 billion Thames Tideway Tunnel, which has been criticized for the water bill while investors derive financial benefits.
The new British nuclear plans
By transferring the risk of private investors to taxpayers, nuclear developers will be able to borrow money at lower rates, which will reduce consumers' bills.
On paper, the proposal is better than Hinkley, but it is far from perfect.
The National Infrastructure Commission had a bleak view of the model. "This makes projects cheaper because consumers are effectively funding non-interest-bearing projects. At least some of the risks badociated with construction costs also fall on consumers, an additional hidden cost, as consumers are not paid to manage these risks in the same way as investors, "he said.
In addition, the amounts are only valid if the project is within the planned schedule and budget for the decade needed to build a nuclear power plant. There are few worrying examples where this has been the case. EDF Energy's predecessor at the Hinkley project in Flamanville, Normandy, is expected to cost four times more than initial estimates. Electricity production was scheduled to begin in 2012, but is expected to start in 2022.
The French energy giant said the lessons learned from the Flamanville experiment would allow Hinkley Point to avoid a similar fate. Sizewell will have an even bigger advantage as it will use the same British workers once Hinkley is finished.
Why take the risk at all, though?
"If ministers want affordable, clean energy, the fastest, safest, and cheapest way to do it is to boost renewable energy like wind and solar," said Doug Parr, chief scientist for Greenpeace.
Flexible renewable energy technologies have made major strides in recent years, but ministers remain committed to low-carbon, low-carbon electricity generated by nuclear reactors, despite the financial barriers to their construction.
The energy sector in the UK is cluttered with failed nuclear power plant projects that have so far failed to produce financial results. Already half of the projects proposed three years ago have failed.
But the government's commitment to a new atomic era remains the most reliable element of its nuclear program to date.
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