NFLA media release, 19 December 2022, For immediate use
Nuclear Free Local Authorities ‘bitterly disappointed’ government will press ahead with ‘criminal nuclear power tax’
The UK/Ireland Nuclear Free Local Authorities were bitterly disappointed, but unsurprised, to hear recently British Government confirmation that it has decided to go ahead with the controversial Regulated Asset Base funding model for future nuclear power projects.
The government is proposing to use the RAB model to pay for the cost of constructing a new power plant at Sizewell C in Suffolk and for a fleet of so-called Small Modular Reactors to increase nuclear generating capacity three-fold to 24 GW by 2050 in line with the Energy Security Strategy published by Boris Johnson in April of this year.
To the NFLAs RAB should be renamed ROB as it is akin to daylight robbery. The RAB model de-risks nuclear projects for contractors and operators as, rather than requiring them to find the finance upfront, all electricity customers instead face an additional levy on their bills to meet the cost of building the new plants; all of which, based on historic precedent, will be delivered late and way over budget. The public will also have to meet the costs of any delays, which are likely to be considerable.
Responding to a consultation on the proposals launched by the Department of Business Energy and Industrial Strategy in August, the NFLA called for RAB to be scrapped and for nuclear operators to source money for new construction projects from the private sector, rather than electricity customers.
The NFLA is especially concerned at the unfairness of levying elderly customers who are unlikely to see any ‘benefit’ from the nuclear power generated, given that construction of any new plant is likely to take at least a decade, or levying poorer households, who are already at risk of fuel poverty. The NFLA called for elderly and poorer households to be exempted. The proposal is also particularly iniquitous when applied to Scottish customers, who will be taxed despite the Scottish Government refusing to countenance new nuclear plants for the nation.
The government published its response on 14 December stating that it will go ahead with the proposals, with only a vague and unsubstantiated recognition that ‘support for vulnerable groups would be best tackled holistically.’
Commenting on the response, NFLA Steering Committee Chair, West Dunbartonshire Councillor Lawrence O’Neill said:
“It is outrageous that British Government ministers want to press ahead with a scheme that imposes a criminal tax to pay for their nuclear delusion on the poorest, oldest and most vulnerable customers, and doubly criminal when imposed on customers living in Scotland where we as a nation certainly do not want to entertain it.
“Nuclear power projects are notorious for coming in late and way over cost, Hinkley Point C being a case in point. RAB simply takes away the risk to prospective nuclear operators of raising initial finance in the commercial lending market and finding the extra money needed to meet cost overruns and delays and transfers it onto electricity consumers who are already struggling to pay overinflated energy bills.
“The most immediate beneficiary EDF Energy will be laughing all the way to the bank as it picks up the subsidy to build Sizewell C collected from British taxpayers then pays the resulting profits from its future operations back to its owner, the French Government”.
