Source · Select Committees · Business and Trade Committee
Recommendation 12
12
Deferred
Paragraph: 61
Publish plans for monitoring 50 GW offshore wind and Crown Estate social value oversight.
Recommendation
In response to this report, the Government should set out how it is monitoring progress against its ambition to deploy 50 GW of offshore wind by 2030. The Government should also set out how it will be responding to the recommendations of the UK Offshore Wind Champion. Furthermore, local communities which host critical national infrastructure must see tangible benefits from doing so, and connections between offshore wind farms and transmission networks need to be better co-ordinated to minimise disruption for local communities. We ask the Government to set out how it will ensure appropriate oversight of Crown Estate decision-making in respect of social value and impact for local communities.
Government Response Summary
The government's response discusses the strategic case for nuclear power, the establishment of GBN, and cost management for projects like Hinkley Point C and Sizewell C. This completely deflects from the recommendation concerning monitoring offshore wind targets, responding to the UK Offshore Wind Champion, and ensuring oversight of Crown Estate decisions.
Paragraph Reference:
61
Government Response
Deferred
HM Government
Deferred
38. There is a strong strategic case for nuclear, even more so in light of the recent energy crisis, based on the department’s strategic analysis of the power sector1. The UK is expected to need a four-fold increase in generation to match a forecasted doubling in electricity demand. The department’s analysis, which underpinned the Net Zero Strategy, demonstrates that deploying significant nuclear capacity, alongside RES technologies, will increase the number of viable generation mixes that meet the 2050 Net Zero target at low cost. 39. The establishment of GBN will help to deliver an overall nuclear programme, a demonstrated way of reducing overall deployment costs. 1 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1120491/szc- designation-document.pdf 8 Decarbonisation of the power sector: Government Response 40. Based on the latest EDF Annual Report, the latest cost estimate for the Hinkley point C project is £25–26bn (2015 monies) and £31–32bn in current values. 41. No decisions have been taken yet on the financing model used for future projects. However, should the RAB model be adopted, the project will be required to meet the Designation criteria, as set out in the Nuclear Energy Financing Act 2022, and all relevant approvals. 42. Under the terms of the HPC Contract for Difference, the strike price is £92.50 per megawatt hour. Consumers will only pay when HPC is up and running. Any additional costs incurred are the responsibility of EDF and its partners on the project and will not fall on taxpayers or consumers. The Nuclear Energy (Financing) Act 2022 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 SZC, government will ensure the interests of consumers and taxpayers will be protected, and there will be multiple mechanisms to ensure that consumers do not bear unacceptable costs. These include continuing our robust due diligence of the project and its costs and schedule before making a final investment decision, and, if the project is approved, implementing any appropriate incentives regime to manage project costs and schedules. We also take confidence that SZC is planned as an above-ground replica of HPC and would be able to take the lessons from its construction.