Key Facts

• New nuclear projects have a track record of coming in 20% over budget within Europe and 100% worldwide since 1990.
• Construction time overruns average 40% for European projects and 90% globally since 1990.
• Under the RAB model, consumers start paying towards project costs from the commencement of construction.
• The Bill does not specify materiality thresholds for cost caps.
• The developer should bear more costs if there are significant overruns.
• Appeals processes should be bidirectional to ensure scrutiny on both sides.
• An independent third-party impact assessment should precede binding agreements.
• Thames Tideway and Heathrow terminal 5 projects benefited from RAB models but had cost overruns.
• Sovacool et al. found that 97% of new nuclear plants came in over budget with an average overrun of 117%.
• Flyvbjerg et al. reported a median cost overrun of 68% and schedule overrun of 40% for nuclear projects.
• Hinkley Point C is estimated to cost at least £24 billion.
• Yvonne Fovargue informs that the allotted time for questioning has ended.
• The session was part of a Public Bill Committee meeting on the Nuclear Energy (Financing) Bill.
• Chris Ball estimates RAB financing adds £1 per month to consumer bills.
• Alan Woods forecasts Rolls-Royce's reactor under RAB at £35/MWh versus £60/MWh under CfD.
• Dawn James notes hidden costs in the CfD model passed on to consumers over time.
• The RAB model is viewed as essential for encouraging sufficient private capital investment into large-scale nuclear projects.
• There is a need to balance risk allocation within the RAB model to attract investors.
• Ofgem is considered an appropriate body to regulate the RAB model in the context of nuclear power financing.
• The RAB model aims to reduce financial risks and costs associated with nuclear projects.
• Lessons learned from Hinkley Point C can lead to a 20% cost reduction for subsequent units like Sizewell C.
• Proven technology is used in SMR designs, leveraging existing expertise and manufacturing capabilities.
• Current UK nuclear power stations, excluding Sizewell B, will be offline by 2030.
• There is an increasing demand for electricity in the UK.
• The first SMR is scheduled to operate by 2031.
• All new plants must go through the generic design assessment process.
• The GDA process will take three and a half to four years followed by another 18 months for step 3.
• Engineers from Hinkley C will start demobilising in 12 months, with three quarters of workforce demobilised over one to two and a half years.
• Without RAB nuclear financing model, UK would depend on imported technologies financed overseas.
• The UK's nuclear industry has historical significance in global nuclear technology.
• There is concern over securing control of electricity generation to avoid dependency on other nations for energy supply.
• Legislative support for a robust financing model for nuclear projects, such as the RAB model, is crucial.
• Yvonne Fovargue is chairing the examination of witnesses.
• Tom Thackeray is from the Confederation of British Industry, Programme Director for Decarbonisation.
• Tom Greatrex is CEO of the Nuclear Industry Association.
• Rebecca Groundwater represents Energy Industries Council as Director of External Relations.
• Chinese General Nuclear is a minority financial shareholder in Sizewell C.
• The UK government has allocated £1.7 billion for pre-development works at Sizewell C.
• The Nuclear Industry Association (NIA) seeks more detail on how the funding will be utilised.
• Yvonne Fovargue asks questions about clause 1 of the Nuclear Energy (Financing) Bill.
• The query pertains to the designation of a nuclear company and the clarity provided in the Bill regarding this process.
• The Climate Change Committee's balance pathway scenario suggests a need for 10 GW total nuclear capacity by 2035.
• The supply chain is ready with people, skills, and capability but needs stability and clear pipeline of opportunities.
• Development of an objective finance taxonomy for infrastructure contributing to low-carbon future and net zero is ongoing.
• Mycle Schneider is an independent analyst based in Paris who coordinates the annual World Nuclear Industry Status Report.
• Professor Stephen Thomas is emeritus professor of energy policy at the University of Greenwich with over 40 years of experience as an independent energy policy analyst.
• Doug Parr is the policy director and chief scientist at Greenpeace UK.
• Mycle Schneider states that solar and wind energy costs are about a quarter of those for nuclear.
• National Grid scenarios indicate Sizewell C is only required in one scenario out of three to reach net zero by 2050.
• Professor Thomas argues that nuclear power lacks flexibility, unlike renewables which can be complemented with batteries or demand-side response.
• The V.C. Summer plant project was abandoned in July 2017 due to cost overruns and Westinghouse's bankruptcy.
• Construction of the V.C. Summer nuclear plants started in 2013, with an original completion date set for 2017 but costs increased by 75%.
• Jeffrey A. Benjamin, former senior vice-president at Westinghouse, was charged with felony counts including conspiracy and wire fraud.
• The Dungeness B plant in Britain took 24 years to complete from start of construction to commercial operation.
• Yvonne Fovargue reminds participants to stay within the scope of the Bill.
• The debate involves discussions on firm power requirements and the need for baseload power.
• Doug Parr argues for the rapid deployment of renewables and greater interconnection with the continent as alternatives to nuclear energy.
• Professor Thomas supports energy efficiency measures over expensive new power sources like nuclear.
• The Bill is designed to facilitate primarily Sizewell C.
• £1.7 billion allocated in the Budget for nuclear projects, likely aimed at enabling a final investment decision for Sizewell C.
• CGN’s involvement in UK projects includes Hinkley Point C, Sizwell B/C and Bradwell B.
• The RAB funding mechanism could see bill payers paying for an asset before it generates electricity.
• Decommissioning funds have historically failed multiple times in the UK.
• The Committee meets again on Thursday 18 November at half-past Eleven o'clock.
• No further questions from Members were raised after Doug Parr's comments.