Dan Millward

What about California?

True, but it's mainly about reducing the cost of capital and the overall cost of the project. Consumers will bear the risk, but it will be capped by thresholds set by the regulator. Annoyingly I haven't seen anything published on the value for money assessment or details of the RAB itself though

I think people see the big price tag and history of nuclear construction and baulk at the idea the taxpayer/bill payer should be on the hook for it.

I get your point about bills, and I'm surprised they decided to do it politically, but it's one of the only ways to reduce construction financing cost

To me it seems like the people happy to fund renewables via bills are furiously against doing the same with nuclear tbh...

Yeah the UK picked the wrong tech. AGRs have big trouble with the graphite cracking, so modulating and turning on and off only exacerbates the problem given they're ar the tail end of their life

Why does Sizewell C need to 'recover the £40bn cost' if the construction costs have been paid off during construction? Are they charging billpayers more per mw/h to retroactively repay billpayers?

My understanding is the RAB is purely for the construction phase, i.e. a guaranteed rate of return based on delivery of certain milestones of the project which reduce the cost of financing and prevent compound interest. Once operating I'd imagine there would also be a CfD with similar protections

The variable O&M cost is mainly related to fuel, which (finger in the air) is around 25-35% of the overall O&M costs. So the economic incentive to modulate is low, but exists.

They're low but non-zero. AFAIK French renewables have no incentive to reduce output in low/negative prices, so nuclear modulates to accommodate.

The French fleet modulates more than is typical of nuclear, but they don't 'shut down over the summer' as far as I'm aware. Their main issue is that many are based on rivers, so high temperatures and drought affect output.

The O&M costs of nuclear are small, so if you've paid the CAPEX costs through RAB during construction (and avoided the compound interest during 10 years construction) then the marginal cost of electricity will be competitive. No? I agree that a lot will depend on how the RAB is structured though

It's no secret that they will use a RAB, like most major infrastructure projects. The only other option is taking it on balance sheet, which nobody wants to do

Maybe that's the problem? They'd be going into the next election with Farage claiming Labour are introducing a postcode lottery which will put up bills in marginal seats, and blaming it on net zero

Civil servants also can't respond. Perfect punching bag.

This only makes sense if you ignore the 282 TWh of French nuclear generation in 2022. Obviously far below average but if France had the say energy mix as say Germany the situation would of course have been much much worse.

I think you're vastly overestimating the effectiveness of nuclear industry lobbying.

Agree. I can understand ideologically why the Tories wouldn't, but a Labour Govt should have the stones to do it. Taxpayers/billpayers end up footing the bill eventually, why not minimise that cost (like every other country does)?

A minor point (but with a big impact) is that it's EDF borrowing at higher commercial rates rather than lower direct French gov borrowing. So this has a long term impact on compound interest over a 35 year period.

It's reasonable for the French to say they should prioritise a domestic programme over foreign projects. You can already see EDF wanting to be a supplier for SZC instead of a developer, which is why HMG have the majority share in the project company and will likely do most of the heavy lifting.

Fair question. Obviously no way of knowing, but I imagine similar arguments were made when we abandoned the PWRs 30 years ago (only building 1 reactor at SZB), and turns out we still need it 30 years later. Personally I favour of an 'all of the above' approach to decarbonisation and energy security

The CfD is for 35 years, but the lifetime of the reactors is 60 years and in all likelihood at least 80 years. Even if the CfD doesn't cover the cost of the project (which I doubt), you dont think another 25-45 years of operation will lead to a profit?

HMG own 76.1% of the project company and EDF own the rest.

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