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Posted 2 years ago | 3 minute read
UK targets “major steps” towards energy independence with new package
The government has set out the “major steps” it will take to ensure British energy independence.
Marking “part of the UK’s biggest step yet in the journey to energy freedom”, the government confirmed on 29 November that plans to develop Sizewell C have been approved and that it will be taking a £700M stake in the project – the first state backing of a nuclear project for more than 30 years.
Sizewell C also marks the first project in the UK to use the newly established Regulated Asset Base (RAB) funding model for nuclear power. RAB has already proven a success, used for the Thames Tideway Tunnel and Terminal 5 at Heathrow and the government anticipates that financing a large-scale nuclear project through the RAB model (compared to the existing Contracts for Difference scheme) will result in savings of at least £30B for consumers on each project over the duration of its lifetime.
The driving force behind the government’s plans is the Energy Bill, which it revealed will go through Parliament, having been introduced to the House of Lords earlier in the year by BEIS Parliamentary Under-Secretary, Lord Callanan. Described it as the “most significant piece of primarily energy legislation since 2013”, the Bill consists of around 250 clauses and includes backing for CO2 transport and storage, industrial carbon capture and low carbon hydrogen production, containing measures to bring forward business models for each, the establishment of the Future System Operator and reducing the risk of fuel supply disruption “from accidents, severe weather, malicious threats and more.”
Business and Energy Secretary, Grant Shapps, said:
“Global gas prices are at record highs, caused by Putin’s illegal march on Ukraine. We need more clean, affordable power generated within our borders – British energy for British homes. Today’s historic deal giving government backing to Sizewell C’s development is crucial to this, moving us towards greater energy independence and away from the risks that a reliance on volatile global energy markets for our supply comes with. This is at the heart of a package of measures that – together with the new Great British Nuclear and powers of the Energy Security Bill – will ensure secure supply for now, and for generations to come.”
GridBeyond Managing Director UK and Ireland Mark Davis said:
“Nuclear power has a vital role to play in both bolstering our energy independence and reaching our climate change targets. Expanding our own sources of cheap, clean and reliable power will make us less reliant on volatile international markets. But the government also needs to ensure we have the right incentives and regulatory frameworks in place to encourage investment in other low carbon energy technologies, which can be built quickly and at low cost, and in the flexible assets that support them”.
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