Green light to use new nuclear finance model for Sizewell C

The government has cleared an EDF subsidiary to receive funds, via its new nuclear financing model, to deliver the proposed Sizewell C plant.

In a significant landmark for the nuclear project, the Department for Business, Energy and Industrial Strategy (BEIS) has designated NNB Generation Company (SZC) Limited to receive money via the regulated asset base (RAB) model.

The RAB model, which is designed to cut lending costs by allowing developers to collect regulated payments from suppliers while projects are being built, has been used for other major infrastructure projects such as the Thames Tideway ‘super sewer’.

Under the Contracts for Difference mechanism, which has been used for EDF’s Hinkley Point C nuclear plant, developers must finance all construction costs upfront and only receive payments once projects have begun generating electricity.

Parliament recently approved government legislation allowing the RAB model to be used for new nuclear projects. Sizewell C in Suffolk would be the first nuclear project to use this model, which its advocates claim will cut financing costs and hence lower bills for customers.

A report, published by BEIS on Tuesday (14 June), set out the case for Sizewell C meeting the Nuclear Energy (Financing) Act’s criteria for utilising the model.

The report said business and energy secretary Kwasi Kwarteng is satisfied that the project will deliver value for money, although the figures have been redacted due to “continued policy developmen” in the area.

It also said nuclear power can help to lessen reliance on foreign energy and that excess heat extracted from steam from the plant could be used to produce hydrogen.

The conditions for RAB designation include securing a nuclear site license for Sizewell C by the end of 2027.

Consultation will close on 4 July and is the first step in potentially allowing the nuclear company to receive funding under the RAB model.

The Stop Sizewell C campaign criticised the redaction of the figures in the report’s value for money assessment section.

It said: “It’s outrageous that ministers are hiding the cost to electricity bill payers and the public purse of Sizewell C, while claiming to be transparent. By redacting the finances, it is impossible to know if the secretary of state’s judgement on value for money is sound.”

The campaign also criticised the government’s failure to impose conditions related to the EPR reactor technology proposed for Sizewell C, describing its track record” as “catastrophic”.

The government has also published a consultation on how nuclear projects will receive funding under the new RAB model.

The consultation seeks views on the proposals, which will be set out in draft regulations to be approved by Parliament.