The Government is proposing to raise funds for new large-scale nuclear plants in the UK with a "Regulated Asset Base" (RAB) model. The RAB model, designed to encourage investment for new nuclear power projects, involves sharing costs between all parts of a project’s supply chain. This includes investors, consumers and energy suppliers. It’s the same model used to finance the Thames Tideway Tunnel and could cause consumer energy bills to rise by £6 per year.
We’ve just submitted a response against the proposal, which we disagree with for two reasons:
Nuclear power is more expensive than renewables
Bulb’s mission is to lower bills and lower emissions. We want UK consumers to have access to the most affordable and greenest types of electricity. Generating electricity from nuclear is more expensive than renewables. Nuclear power costs around £90/MWh, which is roughly double the current market rate of electricity from wind or solar.
We must champion all low-carbon flexible solutions
Renewables, like wind and solar, are intermittent ways to generate power. The wind isn’t always blowing and the sun is not always shining when we need electricity the most.
But it’s important to have a secure, consistent energy supply. We agree with the government that as the amount of renewable electricity generation increases, we need more ways to balance supply and demand on the grid.
We just don’t believe new nuclear is the best way to do that. If a RAB model is implemented, we’d like to see it apply to all low-carbon solutions that address the intermittency of renewable supply. We think this could create an energy market that works better for consumers and for the planet.
Our advice to BEIS
Large new nuclear power projects are an expensive way to deliver security of supply
UK consumers should have access to the most affordable and greenest types of electricity generation. The UK will pay around £90/MWh for nuclear power vs. £39/MWh (offshore wind) and £47/MWh (Solar PV).
We are concerned about the substantial costs beyond building nuclear plants, such as decommissioning and waste disposal. It’s estimated to reach £121 billion to clean up the UK’s historic nuclear sites over the next century.
All low-carbon flexible technologies should be eligible
There are more affordable ways to manage the intermittency of renewable supply than building new nuclear projects. The cost of energy storage has fallen rapidly in recent years - lithium-ion battery prices are 85% lower today than in 2010.
A RAB model should be extended to all low-carbon technologies to help balance supply and demand on the grid, like grid-scale batteries.
The RAB model doesn’t protect all consumer interests
Only 35% of the UK public support nuclear energy, and that support is decreasing. The proposal doesn’t protect customers who choose to be on a renewable tariff, but adds costs to their bills for a technology they won’t directly benefit from.
We think the RAB model ties the consumer to a decades-long investment they increasingly don’t want to make: in 2015, 1% of the UK were on a renewable tariff. Today that figure is closer to 10%.
The RAB model is unlikely to provide value for money for consumers
We disagree that the potential cost of nuclear projects going over budget should be shared with consumers. Most nuclear projects overrun - highlighted by the recent announcement that Hinkley Point C is over-budget by £2.9bn.
We don’t think it’s right that consumers have no control over the project risk, but they’re asked to absorb that cost.
Read more about the proposals on the gov.uk website.
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