It is “impossible to see” how new nuclear power stations will be developed in the UK until a framework for financing them is in place, Sir John Armitt has warned.
The National Infrastructure Commission (NIC) chair told a meeting of the Treasury select committee yesterday (23 September) that the blame for the recent collapse of a string of nuclear projects, including this month’s abandonment by Hitachi of work at its proposed Wylfa plant, stemmed from the failure of developers and the Treasury to agree on financing.
He said: “There will be no nuclear power stations until there can be understanding of how risks are going to be shared and funded.
“Until arrangements can be reached on how they are financed it is impossible to see any further nuclear power stations being built in this country,” he said.
The Department for Business, Energy & Industrial Strategy (BEIS) has been exploring how the RAB (regulated asset base) model, which permits developers to secure returns from infrastructure assets before they are operational and generating revenues, can be applied to the nuclear industry.
The NIC said in its National Infrastructure Assessment, submitted to the government two years ago, that the plunging cost of renewables means that only more new nuclear power station should be ordered before 2025.
Sir John also said a better balance must be struck between long-term concerns about funding electricity network infrastructure and shorter-term worries about customer bills in order to ensure the rapid rollout of electric vehicle charging points.
He said: “If you were to get a better balance between the future needs and resourcing of our infrastructure as opposed to always focused on the cost to the consumer, you would get better investment from the private sector.
The former Olympics supremo told the committee that there will have to be a “trade-off” between the government and the private sector in order to persuade the latter to invest in charge points at “the scale and speed” required to implement a ban on internal combustion engine cars and vans by the government’s target date of the early 2030s.
He said: “If you want to get to that point, you need to get infrastructure in place.
“If the private sector are not able to do it at that rate, the government needs to get involved.”
Sir John also said there is “no contradiction” between the government’s goal to level up the economic performance of the UK’s lagging regions, and its target to cut emissions to net zero by 2050.
As an example, he pointed out that the UK’s main hubs for developing hydrogen and carbon capture and storage (CCS) are located in the north of England.
And he said the UK has an opportunity to lead the world in hydrogen production as well as cutting its own carbon emissions, but only if it gets on with laying down a policy framework for supporting the fledgeling industry.
He said: “We could give Britain a competitive advantage but we need clear policy very quickly and need it now.
“If we don’t make these decisions and aren’t able to address these issues, we won’t get to net zero by 2050.”