Utility Week

UTILITY WEEK | 23RD - 29TH NOVEMBER 2018 | 13 Policy & Regulation The French utility revealed at a recent Parliamentary briefing that using the RAB model, combined with savings that could be delivered through a more efficient supply chain, would cut the level of strike price that the company requires to £65/MWh – substantially lower than the controversial £97.50/MWh agreed for Hinkley Point C. "We need to have in place an answer for potential buyers about the form of financial model," says an industry source. RAB model potential The RAB model could be a "positive and sustainable financial framework for new nuclear" says a nuclear source. "It has a lot of potential but we need further clarity about how it will work." The government has told the industry that it may need to draw up primary legisla- tion before the RAB can be rolled out in the more complex nuclear environment. The Department for Business, Energy and Industrial Strategy (BEIS) is understood to have a 40-strong team working on RAB; it is expected to report within the next few months. But the clock is ticking. Keeping costs to the minimum at Sizewell would depend on ensuring a seamless transition for shiing the civil engineering and construction teams working at Hinkley across to the Suffolk coast. This gives about three years for EDF to raise the finance for Sizewell. Dr Jonathan Marshall, head of analysis at the Energy and Climate Intelligence Unit, questions whether the nuclear industry should be offered such special treatment. "Competition is working outside the nuclear sector but the nuclear industry always wants more. "With RAB it's tricky to keep an eye on where the money is going," he says, express- ing concerns about the risks he says are inherent with such a complicated financing mechanism. "You have a regulator trying to keep up with an army of consultants who know the system inside out." Nevertheless, Yeo says some kind of spe- cial task force may be needed to get the pro- ject off the ground: "If it's going to work, it needs a lead from central government. "The fear is that this issue has less atten- tion than it needs because all the energy in Whitehall is being sucked out by Brexit." Howard agrees: "If the government wants it to happen, it has to get more involved." Ensuring security of supply should con- centrate minds, concludes Bowden: "Nobody is going to be interested in financing if the lights go out." POWER REACTORS OPERATING IN THE UK Source: World Nuclear Association Plant Type Present capacity (MWe net) First power Expected shutdown Dungeness B 1&2 AGR 2 x 520 1983 & 1985 2028 Hartlepool 1&2 AGR 595, 585 1983 & 1984 2024 Heysham I 1&2 AGR 580, 575 1983 & 1984 2024 Heysham II 1&2 AGR 2 x 610 1988 2030 Hinkley Point B 1&2 AGR 475, 470 1976 2023 Hunterston B 1&2 AGR 475, 485 1976 & 1977 2023 Torness 1&2 AGR 590, 595 1988 & 1989 2030 Sizewell B PWR 1,198 1995 2035 TOTAL: 15 units 8,883 MWe AGR = advanced gas-cooled reactor. Most AGR units are running at significantly less than original or design capacity. PWR = pressurised water reactor NUCLEAR POWER PLANTS IN THE UK, AS OPERATIONAL IN MAY 2018 Source: DUKES/BEIS 8 2 4 3 5 7 6 1 Dungeness B 1&2 Hartlepool 1&2 Heysham I 1&2 Heysham II 1&2 Hinkley Point B 1&2 Hunterston B 1&2 Torness 1&2 Sizewell B 8 7 6 5 4 3 2 1

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