Ministers ‘planning new nuclear subsidies’

Ministers are considering new subsidies for the nuclear industry following Hitachi’s withdrawal from the market this week, it has been reported.

Horizon Nuclear Power announced yesterday that it will cease all remaining activity on its two nuclear developments – Wylfa Newydd nuclear facility at Anglesey, and its Oldbury nuclear project site in south Gloucestershire.

The Times reports that Boris Johnson and senior adviser Dominic Cummings are keen to restate the government’s commitments to nuclear builds and chancellor Rishi Sunak and business secretary Alok Sharma will be invited to a summit to discuss future levels of government support.

Hitachi-subsidiary Horizon announced the shutdown of the Wylfa project in January last year after failing to agree financing terms with Whitehall. The company called the Regulated Asset Base (RAB) funding model, where private investors buy stakes in long-term infrastructure projects, with users paying for the infrastructure through energy bills, to be introduced for the scheme.

Horizon director of nuclear operations Gwen Parry-Jones told MPs last year that getting early returns, as they would under the RAB model, was key to the company being able to commit to the project. The then construction minister Richard Harrington told MPs in February 2019 that government work on the RAB model would be completed by that summer.

A Department for Business, Energy and Industrial Strategy (BEIS) consultation on using the RAB model for nuclear projects ran from July to October 2019. The government has yet to publish its outcome or a response.