Government ministers are mulling over plans to launch a state-owned nuclear company, which would assume stakes in future domestic projects.
Business secretary Kwasi Kwarteng is considering the move as he looks to speed up the development of nuclear plants – which have suffered years of delays- and reduce the UK’s reliance on foreign energy, according to The Sunday Times.
Last October, Downing Street unveiled The Nuclear Energy Bill to ensure more nuclear developments could get off the ground through public funds.
This included the Regulated Asset Base (RAB) model to front-load costs to consumers during the construction phase of future projects, to later attract UK-based private backers such as British pension strategies, insurers and institutional investors.
RAB has been used to finance previous infrastructure projects such as the Thames Tideway Tunnel and Heathrow Terminal 5.
Despite the overhaul, the government has struggled to entice new investors – with Downing Street keen to find alternatives to Chinese investment amid security concerns.
Currently, the planned Sizewell C nuclear plant includes a 20 per cent stake from China General Nuclear Power Group (CGN Power).
Nuclear power makes up around 20 per cent of the UK’s power generation – although all but one of the country’s existing nuclear reactors are due to be decommissioned by 2030.
Plans to renew the country’s nuclear base so far include two identical power stations – Hinkley Point C and Sizewell C – alongside Rolls-Royce’s rollout of small modular reactors.
However, the government is expected to ramp up production further, with Prime Minister Boris Johnson calling for “big new bets” on nuclear.
In a Daily Telegraph column published last week, he said: “It was the UK that first split the atom. It was the UK that had the world’s first civilian nuclear power plant. It is time we recovered our lead.”
Johnson and Sunak at loggerheads over nuclear plans
While Johnson has consistently pressed for the UK to ramp up energy projects to ensure supply security and independence, it is unclear if a new state backed company will be a part of the government’s upcoming energy strategy.
He is set for talks tomorrow with executives from the nuclear industry, including France’s EDF and Rolls-Royce, to discuss how to develop nuclear power projects at a greater pace.
However, there are continued disagreements between Downing Street and the Treasury over the ramp up of nuclear power, and whether Johnson’s ambitions are realistic.
Last week, Chancellor Rishi Sunak insisted Boris Johnson delayed the rollout of the energy strategy, to give him more time to establish the costs of building nuclear and renewables projects.
Johnson is privately frustrated with Rishi Sunak over the Chancellor’s apparent resistance, according to The Sunday Telegraph.
The newspaper understands he is frustrated that Sunak appears reluctant to embrace a “dash to nuclear.”
He considers crucial to shore up Britain’s energy supplies long-term and reduce the country’s reliance on natural gas.
The Prime Minister reportedly believes the Treasury was at least partly responsible for scuppering earlier attempts to get nuclear energy into place, due to cost concerns.
There are also growing expectations from industry analysts that the Treasury will have to intervene again next winter to help households through the energy crisis.
Energy experts now forecast the consumer price cap could spike to £3,000 per year in October – with the Chancellor having rolled out a £9bn rebate scheme to deal with the recent hike to nearly £2,000 per year.