Source · Select Committees · Science, Innovation and Technology Committee
Recommendation 42
42
Acknowledged
Disclose best estimate of public risk value and management plan for gigawatt nuclear projects.
Recommendation
It may be the case that the size of capital outlay means that private investors will not repeat a CfD contract for new nuclear, whatever the price. But the lack of alternative choices should not mean that any terms will be acceptable for a RAB financed plant. The Government should make, and disclose, its best estimate of the value of the risk that would be taken on by the public, and a clear plan of how those risks can be managed through incentives during the development, construction and operational phase of the project’s lifetime. (Paragraph 220) 106 Delivering nuclear power
Government Response Summary
The government stated that it will ensure consumer and taxpayer interests are protected as a shareholder in Sizewell C, committing to implement multiple mechanisms to manage project costs and schedules and ensure unacceptable costs are not borne by consumers before a final investment decision.
Government Response
Acknowledged
HM Government
Acknowledged
In establishing use of the RAB model for use on nuclear projects, the Government followed the recommendation of the National Audit Office that such a model could represent better value for money to consumers than the Contract for Difference model used at Hinkley Point C, by reducing the cost of project finance, the biggest driver of new nuclear project costs. The Act requires the Secretary of State to take the interests of existing and future consumers (including in terms of cost and security of supply) into account when implementing a RAB model for a designated project. As a shareholder in Sizewell C, Government will ensure the interests of consumers and taxpayers are protected, and there will be multiple mechanisms to ensure that consumers don’t bear unacceptable costs. before making a final investment decision, and, if the project is approved, implementing any appropriate incentives regime to manage project costs and schedules.