U.K. Seeks $27 Billion a Year Boost for Power Industry
U.K. Seeks $27 Billion a Year Boost for Power Industry
(Bloomberg) -- A chunk of the 20 billion pounds ($27 billion) a year that the U.K. plans to invest in the energy sector will need to go toward building stable forms of power generation that can keep the lights on when the wind drops.
Britain will need back-up for the 40 gigawatts of offshore wind it’s planning to construct by 2030. That will come from nuclear plants, power stations that burn hydrogen, or natural gas with carbon capture and storage, according to the National Infrastructure Plan published by the U.K. government Wednesday. Building more grid connections and ways of storing electricity will also be needed.
The government will “ensure private capital investment is able to continue to finance the energy transition and allow these technologies and network investments to come forward,” according to the document.
The U.K. needs to reach net-zero emissions by 2050 and a series of recent policy announcements aim to get the ball rolling on a framework to make that happen. Much of the detail on financing for the transition has been deferred to a long-delayed energy white paper, but the plan published Wednesday starts to fill in some of the gaps, particularly for large scale nuclear.
Prime Minister Boris Johnson’s government is still considering the Regulated Asset Base model for financing new nuclear and carbon capture as well as mulling what role the government might play during the construction phase.
The nuclear sector has long been waiting for some reassurance about the future of the technology in the U.K. It’s aging fleet of reactors needs to be replaced and there’s just one project in construction - Electricite de France SA’s Hinkley Point C
“The strategy is of huge symbolic importance,” Vince Zabielski, a lawyer at Pillsbury Winthrop Shaw Pittman LLP, said. “Committing money to a suite of large-scale reactors, alongside the recent 10-point plan’s commitment to develop small modular technology, will provide significant reassurance to the sector.”
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