Nuclear power, despite its clean energy advantages, has faced a decline in government favor over the last twenty years, largely due to safety worries and escalating costs.A significant safety concern arose in 2011 when a powerful earthquake off Japan’s coast generated a tsunami that inundated the reactors at the Fukushima nuclear power plant, leading to a radiation leak. Regarding expenses, nuclear power plants are known for their ample price tags and are susceptible to construction delays and soaring costs.
Research conducted by Boston University’s Institute for Global Sustainability, which analyzed hundreds of energy projects, identified nuclear power plants as the worst offenders for cost overruns and schedule slippage. On average, these projects exceeded their initial cost projections by 102.5%, more than doubling the original estimates.
Though, nuclear energy is currently experiencing a revival, particularly in Britain and across Europe. This resurgence is attributed to the dramatic increase in energy prices following Russia’s invasion of Ukraine, which has prompted a reassessment of the long-held reluctance to depend on nuclear power.Ed Miliband, the British Secretary of State for Energy Security and Net Zero, stated that the government is making the necessary investments to usher in a new era for nuclear power, aiming to eliminate delays and reduce reliance on volatile global fossil fuel markets to achieve lasting reductions in energy bills.Still, governments must still overcome significant financial obstacles. Potential investors in nuclear projects are frequently enough hesitant to commit funds due to the risk of shouldering cost overruns. In the UK, the Hinkley Point C nuclear power plant in Somerset has seen its costs escalate from an estimated £18 billion to approximately £46 billion ($84.7 billion).
To address these financial apprehensions, the British government is employing a novel funding approach for the Sizewell C project. This model utilizes a regulated-asset-base framework, where companies involved in constructing new plants receive payments during the construction phase. This strategy aims to mitigate development risks for these companies, enabling them to secure more favorable financing.
To fund these ongoing construction costs, the British government plans to add roughly £1 ($1.84) per month to current consumer energy bills.
Upon completion, Sizewell C will be the second nuclear power plant to be constructed in Britain in over two decades. In may 2020, the project was estimated to cost £20 billion ($34.4 billion), according to a report from EDF.However,by 2024,this figure has doubled to £38 billion ($70.1 billion).
