The UK government has been criticized for exposing low-income households to the cost of building the Sizewell C nuclear power plant while leaving factories “uncovered” as a crucial planning decision is due this week.
If given the green light, the government hopes to use a regulated asset-based financing (RAB) model to finance the project, proposed by French energy firm EDF.
RAB reduces risk for investors, who will receive regular payments before the project begins to generate energy. However, it also means that customers pay for construction costs through higher energy bills.
A consultation on the use of the RAB model will close next month and shows that operators in energy-intensive industries would be exempt, but households receiving universal credit would have to pay.
In the consultation, officials said the exemption for electricity-intensive users, such as factories, would avoid the risk of putting them at a “significant competitive disadvantage” when operating in international markets, as they may have to to add costs to the price of your products.
Deputies had suggested that electricity suppliers could not recover the costs of their RAB payment obligations from consumers with universal credit.
However, officials rejected the idea, saying the move could “discourage suppliers from engaging in commercially beneficial practices,” such as payment plans and loyalty benefits to attract customers. They also argued that other vulnerable consumers who do not claim universal credit could also be affected by the measure.
Green Party MP Caroline Lucas said: “When energy bills are skyrocketing right in the middle of a cost-of-living scandal, the last thing people can afford is the cost of elephant balloons. embryonic nuclear targets such as Sizewell C.
“These projects are not only extremely expensive to build in the first place, with Hinkley Point C now at £ 26 billion without having generated a single watt of energy, the RAB business model conveys this huge initial cost directly to the consumer. that giant companies are saved with generous exemptions, the most disadvantaged in society will pay the bill. Nuclear is too slow, too expensive and the wrong priority. “
Sizewell’s 3.2 gigawatt plant in Suffolk could be able to generate electricity for 6 million homes and is part of a project to approve a nuclear reactor each year by 2030.
Alison Downes of the Stop Sizewell C campaign said: “Taxes of any kind affect the poorest the most and this nuclear tax is no exception. Million-pound businesses will be let go if they use a lot of energy, but a family with universal credit struggling to pay its heating bills will have to pay to pay for an unwanted nuclear power plant. “
The Department of Business, Energy and Industrial Strategy (BEIS) said the government considered it very important to support low-income households, but believed that “support for vulnerable groups would be better addressed holistically” given the factors that increase energy bills.
BEIS has estimated that Sizewell C would add an extra £ a month to household bills to help with construction costs. But research from the University of Greenwich business school as seen by the Guardian shows that the average monthly cost could reach £ 2.12.
In January, the government allocated £ 100 million to advance Sizewell C to the next stage of negotiations and help the project attract more private investment. In May, he delayed the deadline for a decision on a “development consent order” for Sizewell C from May 25 to July 8.
Sign up for the Daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk
Ministers have commissioned Barclays to lead the search for investors to support the project along with the government and EDF, which plan to take a 20% stake. This structure would force the abandonment of CGN, the state-backed Chinese nuclear specialist that has a 20% stake in the company Sizewell C.
According to the Mail on Sunday, British Gas owner Centrica is considering taking a stake.
CGN has partnered with EDF at Hinkley Point C in Somerset, which has lagged behind and is above budget, but ministers want to avoid further Chinese involvement amid deteriorating relations between the UK and China .