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The British government said Tuesday it will pass legislation providing some form of financing for nuclear power plants, which it hopes will attract investors willing to invest billions of pounds to build new plants.
The government’s move, which will require consumers to pay for these plants as they are built, is expected to give the green light for a long-delayed new nuclear station in northeast London, which is estimated to cost £20bn ($27.5bn).
The British subsidiary of Électricité de France, a French utility company, did extensive preparatory work on the new facility, but was opposed to progress under the current financing system, which requires developers to bear the costs and risks of these extremely expensive projects. in exchange for guaranteed electricity prices when stations become operational.
EDF said in a statement that if the legislation is approved, it will allow the company to continue the project near a fishing village called Sizewell in the North Sea, and construction is ready to begin before the next general election, expected in 2024.
The Sizewell facility will be the UK’s second new facility since the 1990s. EDF is on track to build a factory at Hinkley Point, in southwest England.
Other planned facilities Including someone led by Hitachi in Wales, has fallen in recent years, in part due to developers’ failure to attract funding.
The government is under pressure to build at least one more nuclear plant to replace the old fleet of eight nuclear power plants that produce about 16 percent of the country’s total electrical power. Many of these power plants are expected to close in the coming years, leaving the British power grid behind the steady flow of energy provided by nuclear power plants. The UK is a leader in renewable energy, with a coastline full of wind turbines, but solar and wind power are susceptible to clouds and weak breezes.
Lately increase in electricity pricescaused by a combination of high natural gas prices, low efficiency from wind turbines, and a power cable interruption. France raises UK concerns reserve generation capacity is dangerously weak.
The announcement leaves unanswered questions about whether China will continue to play a role in British nuclear projects. State-owned company China General Nuclear is a minority partner under construction at both the proposed Sizewell facility and Hinkley Point. China General is also seeking regulatory approval to set up a factory of its own design in Bradwell-on-Sea outside of London.
In 2015, the UK signed an agreement to involve China in the country’s nuclear power system. But now there are growing concerns in government about Chinese companies participating in sensitive infrastructure such as nuclear generating stations. And there are concerns about whether other investors might want to be involved in a partially Chinese project.
The announcement said the change in funding is aimed at encouraging a wider range of private investors and “reducing the UK’s reliance on overseas developers”, but does not mention how China’s role will be resolved.
Under the new agreement, the government says interest payers will share a portion of the project’s construction costs through fees on their bills. These taxes will be small – less than a pound a month during the long construction phase – and will ultimately save consumers at least £30bn over the life of a plant because there will be lower financing costs, the government said.
A similar financing arrangement was used to build other British projects, including a new terminal at Heathrow Airport.
Analysts say a lot will depend on how the regulations governing these regulations are written and implemented.
Vincent C. Zabielski, a London-based special consultant working on nuclear issues, said the new system “has great potential to cut costs, provided a robust regulatory mechanism is in place to ensure that the potential for cost overruns is minimized”. In Pillsbury, a law firm.
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