Nuclear industry appeals for new funding model to support Sizewell C

PUBLISHED: 08:00 08 March 2020 | UPDATED: 14:35 08 March 2020

Andrew Hirst

Sizewell C would be built near to the existing Sizewell B Picture: GETTY IMAGES

The Theberton and Eastbridge Action Group on Sizewell C (TEAGS) said a letter from the nuclear industry urging government to support a new financing model for electricity infrastructure exposed the vulnerability of new projects.

TEAGS’ Alison Downes said the Nuclear Industry Association submissions to the Chancellor highlighted growing worries the Treasury may ditch plans for a new funding model, on which EDF Energy’s business case for Sizewell C depends.

The NIA’s letter warns it will be impossible to replace the nation’s ageing nuclear power stations and achieve carbon net zero targets without the right investment policy.

It says there is an “urgent need” for a new financing mechanism to ensure “investor confidence, reduce the cost of capital and provide very significant value to the consumer.”

The proposals have been met with significant opposition Picture: SARAH LUCY BROWN

The letter goes onto say timing is “critical” – as the business case for Sizewell C depends on the timely transfer of operations from Hinkley Point C; EDF’s sister project in Somerset.

It calls on government to respond to consultation on the ‘Regulated Asset Base’ model of funding, which was opened last year.

RAB grants companies rights to charge a fixed price to consumers in exchange for providing the infrastructure.

EDF said RAB could lead to lower financing costs and “significant savings” for consumers.

However, opponents say RAB would expose bill-payers to huge costs.

Paul Dorfman, founder of the Nuclear Consulting Group, said new nuclear projects had experienced “vast cost and time over-runs”.

“Under RAB, the plan is for the burden of risk to pass to hard-press UK consumers and taxpayers,” he added.

The RAB model, which has also been termed a “Sizewell surcharge”, sparked major opposition when consultation launched last year. More than 46,000 people have signed a petition opposing the plans.

Chris Wilson of Together Against Sizewell C said at the time of the petition that without massive subsidies, nuclear projects will “crash and burn”.

Mrs Downes said the industry was right to worry that the Treasury may ditch RAB.

“Based on its other projects, it will be impossible for EDF to accurately predict how much Sizewell C will cost and how long it will take to build,” she added.

“EDF has made it clear that RAB is essential for Sizewell C to proceed, but it will be too expensive, slow to deliver and is not the answer to our climate emergency.

“Any funds spent building Sizewell C would suck vital resources away from cheaper, faster green energy, energy efficiency measures and innovation in new technologies.”

PUBLISHED: 05:30 24 February 2020, Andrew Hirst

The proposals, featured in a National Grid Electricity System Operator report, claim the new transmission route would offer economic benefits and help achieve carbon net zero targets.

But campaigners met the news with disbelief, saying the region is “swamped” and cannot cope with more energy projects.

Michael Mahony, of the Substation Action Save East Suffolk group, said: “It is difficult to comprehend how National Grid can even begin to think that an area which cannot accommodate seven major energy projects is suitable for yet two more. There is no thought to the irreversible damage to the East Suffolk countryside and people’s lives that all these projects will cause.”

Proposals for projects such as Sizewell C power station, various offshore wind farms and two ‘inter-connectors’, transmitting electricity between the UK and Europe, have seen Suffolk named the “Energy Coast”.

But while campaigners say they support renewable energy, they warned a lack of co-ordination from the industry risks sacrificing Suffolk’s precious landscapes for the UK’s growing energy demand.

ScottishPower Renewables’ (SPR) proposals for a 30-acre substation site near Friston, on the edge of the Suffolk Coast and Heaths AONB, have attracted some of the fiercest criticism, including from Suffolk County Council and East Suffolk Council.

SPR claims the substations are needed to transmit power from its East Anglia One North (EA1N) and East Anglia Two (EA2) wind farms, which together with East Anglia Three are expected to power 2.7 million homes.

But with Suffolk expected to host even more wind farms in the future, there is growing concern about the extent of onshore infrastructure that will bring.

The concerns prompted a group of East Anglian MPs to write to Secretary of State for BEIS Andrea Leadsom in October to press the case for an ‘offshore ring main’ (ORM), which would see several wind farms connect to the same marine cable, thereby reducing the disruption onshore.

But while the government considers its strategy on the ORM, National Grid ESO is seeking to push ahead with projects deemed “critical” for its energy needs.

Its Network Options Assessment, published in January, includes the Suffolk to Kent ‘SCD1’ transmission route among 42 projects listed ‘to proceed’, with a completion date as soon as 2028. It estimates the cost as £500m-£1bn.

A further project, ‘SCD2’, would see second 2GW circuit created between Suffolk and Kent, running parallel with SCD1. However, this is currently on “hold”, meaning investment is not required this year.

Although details of the onshore infrastructure required are scant, Mr Mahony claims it will cover a 30 acre site with buildings 28 metres tall, based on similar ‘converter stations’. He believes National Grid will seek to use the same Friston site as SPR plans to use for its substations, meaning further industrialisation of a rural location.

The Suffolk Coast and Heath AONB has previously highlighted concerns about the cumulative impact of energy projects on the natural landscape. Chairman David Wood said that although no details were publicly available yet, he hoped the developer would pay due regard to the purposes of the nationally designated landscape, to conserve natural beauty.

“The Suffolk Coast and Heaths AONB is designated for its natural beauty and supports a wealth of wildlife and has outstanding landscapes,” he added. “This mixture supports a thriving tourism industry worth over £210m per year and supports over 4,500 jobs. We expect those making decisions that may impact the nationally designated landscape will play due regard to the purposes of the AONB.”

The Theberton and Eastbridge Action Group on Sizewell C (TEAGS) has also raised concerns.

TEAGS’ Alison Downes said: “We are going to be swamped. The more we hear about all the energy projects planned for this part of Suffolk, the stronger our fears about the cumulative effects on local people, our precious natural environment, tourism and businesses. Multiple, uncoordinated projects with all their construction traffic and workers, built at the same time, is a terrifying prospect.”

East Suffolk Council said it had not been consulted on the project.

What did National Grid have to say?

National Grid said the Network Options Assessment report was published each year with proposals to meet the future needs of the transmission network – as well as recommendations for those which would be most beneficial.

“National Grid Electricity Transmission (NGET), as the electricity transmission network owner in England and Wales, publishes its response to the NOA each summer,” a spokesman added.

“NGET is currently considering all of the recommendations from the ESO alongside any other options available to deliver the capability required and will be outlining which we intend taking forward in our Network Development Policy in the summer.

“Where any link between Suffolk and Kent might connect to the transmission system has yet to be determined, and where any plans are taken forward, there will be consultation.