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New nuclear plants will reduce UK ‘exposure to volatile gas prices’, MPs hear

New nuclear power plants could reduce the UK’s “exposure to volatile global gas prices”, MPs have heard.

But business minister Greg Hands also faced warnings of the “toxic legacy” that building new nuclear power stations would have in the UK for “future generations”, as he promoted the Nuclear Energy (Financing) Bill.

The proposed legislation aims to allow pension funds and other institutional investors to provide cash for nuclear power stations through a regulated asset base funding (Rab) model.

Consumers would also pay towards the cost of new nuclear power stations during construction through their bills, a process that is aimed at giving private investors greater certainty about their projects.

Business minister Greg Hands (Stefan Rousseau/PA) / PA Archive

This follows uncertainties with current funding models that have resulted in delays to projects such as Sizewell C in Suffolk and Wylfa Newydd in Anglesey.

Mr Hands told the Commons: “Nuclear is part of a low-cost future electricity system. Nuclear helps to reduce our exposure to volatile global gas prices. The measures in this Bill mean we can keep nuclear in the mix at a lower cost than would otherwise be the case.”

Mr Hands said the funding model would add less than £1 per month during the construction phase for the average household energy bill, while reducing reliance on overseas developers for financing.

He told the Commons a project starting construction in 2023 would add “only a very small amount to the average dual-fuel household bill during this Parliament, on average less than £1 per month during the full construction phase of the project.”

He said: “This new funding model will reduce our reliance on overseas developers for financing new nuclear projects. It will substantially increase the pool of potential private investors to include British pension funds, insurers and other institutional investors.”

It brought home to me the absolutely toxic legacy we are leaving for future generations when we create nuclear waste

The minister added that other options, including tried and tested renewables and experimental new energy generation methods, could not achieve the scale needed “to provide the bulk of our electricity when the sun is not shining or when the wind is not blowing”.

Read More: New nuclear plants will reduce UK ‘exposure to volatile gas prices’, MPs hear

2021-11-03 14:14:25

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