Source · Select Committees · Business and Trade Committee
Recommendation 20
20
Deferred
Paragraph: 103
UK nuclear power projects consistently face significant cost overruns and protracted delays.
Conclusion
The British Energy Security Strategy set an ambition for the UK to deploy 24 GW of civil nuclear power by 2050. This significantly raised the level of the Government’s ambition on nuclear power, above estimates suggested by the Climate Change Committee and others. But to be an effective part of a low-carbon, secure and affordable electricity mix, the cost of nuclear power must come down. Nuclear projects in the UK and elsewhere have been beset with delays and overspends.
Government response summary AI-generated
The government's response highlights the importance of Greenhouse Gas Removals (GGRs) like BECCS for net zero and outlines deployment ambitions, ignoring the conclusion about nuclear power costs.
Summary of the government's response below — read the verbatim text to verify.
Paragraph Reference:
103
Government Response
Deferred
HM Government · verbatim extract
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. 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.
Read the full response on Parliament ↗