Source · Select Committees · Business and Trade Committee
Recommendation 21
21
Deferred
Paragraph: 104
Require Government to detail costs, financing, and transparency for 24 GW nuclear power ambition.
Conclusion
In response to this report, we request that the Government sets out: a) its current estimates of the total cost of delivering the Government’s 24 GW ambition; b) its latest official estimate of the total cost of Sizewell C and Hinkley Point C; Decarbonisation of the power sector 103 c) how it plans to finance its 24 GW ambition, including whether future projects will also adopt the Regulated Asset Base model; and d) the impact of the increasing costs of Hinkley Point C and Sizewell C on its plans for nuclear and how it is ensuring sufficient transparency over such costs.
Government response summary AI-generated
The government's response details plans to publish standard terms for the low carbon hydrogen production business model and to design new transport and storage business models, completely ignoring the request for information on nuclear power costs and financing.
Summary of the government's response below — read the verbatim text to verify.
Paragraph Reference:
104
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. 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.
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