Boris Johnson’s plan for new nuclear power plants is expected to raise bills by over £80 a year, an analysis based on energy companies’ figures has found.
The prime minister is expected to “bet big” on nuclear power in an upcoming energy strategy and build up to eight stations, with billions in costs being met through bills.
But Mr Johnson was accused of making matters worse for bill-payers because of the high cost of energy from the plants compared to the alternatives.
Nuclear plants produce large amounts of low-carbon energy – but they are now comparatively expensive compared to renewables, whose cost has plummeted.
Yet the government has de facto banned the construction of new on-shore wind turbines, one of the cheapest forms of renewable energy, through restrictive planning rules.
Mr Johnson’s push for nuclear comes despite reservations from chancellor Rishi Sunak about the cost – but some Conservative activists are resolutely opposed to the visual impact of onshore wind turbines.
Energy company EDF estimates that the cost of funding the Sizewell C nuclear power plant, the only one currently under construction, will add up to £12 a year to household energy bills at its peak.
Opposition politicians say that if the costs of the plans were writ large over eight new similar projects they would amount to an £84-a-year increase in bills.
The increase would come about because the government’s ‘Regulated Asset Base’ funding mechanism for new plants allows constructors to share financial risk with consumers with a levy on bills.
The approach is intended to reduce the risk for companies undertaking the projects, because they require such high up-front capital costs.
“These eye-watering costs show why nuclear power simply isn’t the right approach. At a time where household bills have risen to unprecedented levels, increasing them even more is not the solution,” Wera Hobhouse, Liberal Democrat Spokesperson for Climate Change said.
Ms Hobhouse, whose party based its cost calculations on the EDF estimates, said: “The Tories are simply ignoring the obvious solution. Renewables, particularly on-shore and off-shore wind, are far cheaper than nuclear power and combined with an energy efficiency programme we would see bills fall for millions.”
“Instead the Tories seem happy for people’s record bills to get even higher.”
UK government estimates published by the department for business and energy (BEIS) in 2020 say nuclear power plants generate power at a cost of £102 MW/h.
This figure is over twice the cost of onshore wind, whose equivalent cost estimate is £46 MW/h – a number that has tumbled by £49 MW/h since previous estimates published in 2013. By contrast the cost estimates for nuclear has slightly increased, with nuclear’s initial 2013 estimate at £95 MW/h.
By comparison the figure for offshore wind is £57 MW/h, while large solar installations clock in at £44 MW/h and gas with carbon capture storage £85MW/h. All the department’s estimates are aimed at establishing the costs of projects to be commissioned in 2025.
The government’s energy strategy is being rushed out by minister this week as the war on Ukraine raises energy costs because of a surge in gas prices.
But critics say that aside from raising bills compared to renewable alternatives, new nuclear power will also take too long to come online and will not fix the problems the strategy is seeking to create.
The much-delayed Hinkley Point C reactor was ultimately approved in 2016 but is not expected to start generating electricity until 2027 at the earliest.
Last month Boris Johnson met with nuclear industry leaders ahead of the energy strategy. Tom Greatrex, a former Labour shadow energy minister who is now chief executive of the Nuclear Industry Association, said after the meeting: “Accelerating nuclear projects is absolutely essential to keep energy costs down, cut expensive gas imports and strengthen our energy security as we move towards net zero.
“That means urgently investing in a fleet of large and small nuclear stations, alongside renewable investment, to deliver the clean, sovereign power we need.”
The Department for Business, Energy and Industrial Strategy has been contacted for comment on this story.
