Great Britain seeks funding for nuclear power plants

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The UK government announced Tuesday that it would enact law that will allow a form of nuclear power plant financing that it hopes will attract investors willing to allocate billions of pounds to build new facilities.

The government move, which would require consumers to co-finance the construction of these power plants, is expected to give the go-ahead for a long-delayed new nuclear power plant northeast of London, estimated to cost an estimated £ 20 billion ($ 27.5 billion) .

The British subsidiary of the French energy supplier Électricité de France has prepared the new system extensively, but has shied away from the existing financing system, in which developers have to assume the costs and risks of these extremely expensive projects in return for guaranteed electricity prices as soon as the stations are in operation.

EDF said in a statement that the legislation, if adopted, would allow the company to move forward on the project near a North Sea fishing village called Sizewell, with construction work to begin before the next general election, expected in 2024.

The Sizewell facility would be the UK’s second new facility since the 1990s. EDF is well on track to build a plant in the south west of England at Hinkley Point.

Other planned plants, including one from Hitachi in Wales, have failed in recent years, in part because developers have been unable to attract funding.

The government is under increasing pressure to build at least one more nuclear facility to replace the aging fleet of eight nuclear power plants, which generate about 16 percent of the country’s total electricity. Many of these power plants are to be closed in the coming years so that the UK electricity grid can no longer match the steady flow of electricity from the nuclear power plants. The UK is a leader in renewable energy, with a coast full of wind turbines, but solar and wind power are prone to clouds and weak breezes.

The recent surge in electricity prices, caused by a combination of high natural gas prices, low wind turbine performance and the failure of an electrical cable from France, has heightened concerns that Britain’s spare generation capacity is dangerously scarce.

The announcement leaves unanswered questions about whether China will continue to play a role in UK nuclear projects. A state-owned company, China General Nuclear, is a minority shareholder in both the planned facility at Sizewell and the facility under construction at Hinkley Point. China General is also seeking regulatory approval to build its own plant outside of London in Bradwell-on-Sea.

In 2015, the UK signed an agreement for China to participate in the country’s nuclear power system. However, concerns about the involvement of Chinese companies in sensitive infrastructures such as nuclear power plants are now growing in the government. And there are concerns about other investors wanting to get involved in a project that is owned by China.

The announcement said the change in funding aims to attract a wider range of private investors and “reduce the UK’s dependence on foreign developers,” but does not mention how to resolve China’s role.

Under the new deal, the government says, tariff payers will share a portion of the project’s construction costs through fees on their bills. These levies will be small – less than a pound a month during the long construction phase – and will ultimately save consumers at least £ 30 billion over the life of a facility as the cost of financing will be lower, the government said.

A similar funding arrangement has been used to build other UK projects, including a new terminal at Heathrow Airport.

Analysts say a lot will depend on how the rules that govern these agreements are written and enforced.

The new system “has great potential for reducing costs, provided there is a robust regulatory mechanism in place to ensure that the potential for cost overruns is minimized,” said Vincent C. Zabielski, a London-based special investigator working on nuclear matters at Pillsbury. a law firm.


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