Electricity customers could face £6 charge to fund Sizewell C build
PUBLISHED: 16:04 11 June 2019 | UPDATED: 16:04 11 June 2019
A £6 annual levy could be added to UK electricity bills in order to pay for the construction of Sizewell C nuclear power station.
EDF Energy, which is leading the project, is pressing government to change the law to enable a Regulated Asset-Based (RAB) model to be adopted.
EDF (Electricité de France) points out that a similar funding model - where customers pay - has been successfully used for the Thames Tideway 'super sewer' through London. Similar funding devices also work in funding utilities like the electricity grid through levies contained in bills, and EDF thinks it should apply to major infrastructure projects such as the Leiston plant.
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Work is well under way at Hinkley Point C - the first of the new generation nuclear plants being constructed in Britain using twin EPR reactors - a more modern version of the technology which was used to build Sizewell B nuclear station at Leiston.
The price tag on Hinkley is set at £19.5bn, and EDF believes that a saving of about 20% can be made on the Sizewell project because it would replicate that build, cutting costs.
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That would bring the project in at around £16bn or so. EDF, which has worked in partnership with Chinese energy firm China General Nuclear (CGN) on the Hinkley and Sizewell projects, is in talks with around dozen investment suitors - including Dalmore Capital - which are interested in backing the project.
Putting in place a guaranteed return via the RAB mechanism would make the project more attractive to them, EDF says.
"It's successfully funding a major infrastructure project in London and we believe that model would work very well for Sizewell C. The reason it would work well is because of Hinkley Point C," said an EDF spokeswoman.
"Hinkley Point C is sucessfully being built now, so it reduces the risk on the investment, so more funders are interested in investing. Because they are long term projects, we are looking at how to give a return on their investment, however, it is important to stress that Government will determine how the projects should be financed."
A white paper on future energy policy is due to come out in the summer and this is expected to look at the funding issues around new nuclear and how to solve them.
"It's the model we think could be used for Sizewell C, but it's for government to decide" the EDF spokeswoman said. "Part of funding new major infrastructure projects is an element of the bill, we suggest, would be regulated by an industry regulator to set the charge.
"What's new is it's a new way of funding nuclear power stations, but it's not a new funding model."
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