Addressee: Department for Energy Security and Net Zero · Source location: Page 14, 23
There is interest in whether this delivery model could be applied elsewhere. But SZC reflects specific circumstances in the UK nuclear programme, and the approach may not be transferable. Any department considering a similar approach should be able to explain why it is necessary for taxpayers and consumers to bear so much risk, and show that investor returns are proportionate to the risks investors actually carry.
Response position:
No response position recorded
Delivery:
No implementation status recorded
Addressee: Department for Energy Security and Net Zero · Source location: Page 14, 24a
We recommend that DESNZ and the Company should:
provide transparency of forecast cost and schedule through:
? joint annual updates to Parliament on the project?s progress and
forecast outturn; and
? notifying the Committee of Public Accounts of the circumstances in
which the accounting officers will write to say that key milestones and
thresholds such as the lower regulatory threshold are being approached.
Response position:
No response position recorded
Delivery:
No implementation status recorded
Addressee: Department for Energy Security and Net Zero · Source location: Page 14, 24b
We recommend that DESNZ and the Company should:
use their influence within the project (including with investors), and DESNZ?s
influence across government, to keep cost and schedule below the lower
regulatory threshold.
Response position:
No response position recorded
Delivery:
No implementation status recorded
Addressee: Department for Energy Security and Net Zero · Source location: Page 14, 24c
We recommend that DESNZ and the Company should:
undertake, after an initial bedding in period, periodic evaluation of the
governance and delivery model, to identify improvements and support
the design of future projects. To support this, they should establish and
maintain an ongoing record of how their public and private investors?
involvement contributes to cost control, schedule performance and
risk management, so they can evaluate whether private finance
is delivering on the project-management improvements on which
DESNZ?s value-for-money case depends.
Response position:
No response position recorded
Delivery:
No implementation status recorded
Addressee: Department for Energy Security and Net Zero · Source location: Page 15, 25d
In thinking about future projects, DESNZ should:
strengthen how it presents insight from its modelling when approving future
projects. As illustrated by the analysis in this report, modelling long-term
system costs and net present social value involves substantial uncertainty,
and outcomes are highly sensitive to assumptions. It should publish:
? the scenarios in which the project would ? and would not ? deliver value
for money, and the factors that would drive those outcomes;
? the key assumptions that must hold for net benefits to be realised,
and the principal risks to value for money if they do not;
? how impacts and risks are distributed over consumers and taxpayers,
including intergenerational and distributional effects; and
? how the project fits within DESNZ?s wider portfolio of investments
and risks.
Response position:
No response position recorded
Delivery:
No implementation status recorded
Addressee: Department for Energy Security and Net Zero · Source location: Page 15, 25e
In thinking about future projects, DESNZ should:
develop and use a consistent approach to setting out system cost impacts for
new generation and network upgrades, including how it uses, and explains
the limits of, measures such as levelised cost of electricity and equivalent
strike prices. It should consult with stakeholders on the most appropriate
approaches and metrics to use.
Response position:
No response position recorded
Delivery:
No implementation status recorded