However, even though nuclear power facilities are scheduled to close in the near future for a variety of reasons, the current business secretary, Kwasi Kwarteng, plans to develop two new nuclear power plants by the year 2024.
Two projects had already been agreed upon, one of which received money from China under the leadership of David Cameron.
The Chinese were supposed to bankroll Hinkley Point C in Somerset and Sizewell and then build their own nuclear reactors at Bradwell in the United Kingdom.
In order to develop a new financing structure that does not need China’s cooperation or their installation in Bradwell, Mr Kwarteng intends to terminate the arrangement with the Chinese government.
Instead of urging investors to finance the construction of a nuclear power plant and then wait many years for a return on their investment, Mr Kwarteng wants investors to see a return on their money before the construction of the plant even gets underway.
Consumers will be responsible for paying the improvements, adding an additional £1 per month to their power bills.
Using the new financing model, which is referred to as the Regulated Asset Base, investors such as pension funds give the initial cash necessary to get a project up and running, with the return on investment occurring immediately thereafter.
One government source told The Times that “Part of the reason that we’ve failed to build more than one nuclear power plant in this country is because there are so few global companies that have the balance sheets that can take on such risks on a single project when they will be no return for at least ten years,”
“This system opens nuclear up to many new investors and bring down the cost of the projects to consumers.”
As global gas costs continue to rise, the business secretary added, “we need to ensure Britain’s electricity grid of the future is bolstered by reliable and affordable nuclear power that’s generated in this country,”
“The existing financing scheme led to too many overseas nuclear developers walking away from projects, setting Britain back years.”
“We urgently need a new approach to attract British funds and other private investors to back new large-scale nuclear power stations in the UK.
“Our new model is a win-win for nuclear in our country,”
“Not only will we be able to encourage a greater diversity of private investment, but this will ultimately lower the cost of financing new nuclear power and reduce the costs to consumers and businesses,”
The Sizewell C nuclear power station in Suffolk, which will cost around £20 billion when completed, is a component of a 60-year programme begun by the government.
They anticipate that the two new plants would cut the cost of bills and provide a total savings for customers of moreover £30 billion due to the project being less risky and, as a result, attracting cheaper financing rates.
Any cost overruns resulting from project delays, on the other hand, would be paid by the taxpayers rather than the investors.