The UK has entered formal talks with EDF Energy on how to acquire funding for the construction of Sizewell C, a £20 billion (€22.1 billion) nuclear plant to be located in Suffolk, England.
Sizewell C (light grey, right) will be built on the same plot as the still-going Sizewell B and the decommissioned Sizewell A. Credit: EDF Energy
When completed, the plant is set to generate as much as 3.2 gigawatts of energy, enough to cover roughly 7% of the UK's electrical needs.
The government has insisted no progress has been made on the plan and current talks are discussing the option of having customers pay years in advance in order to fund the project in a scheme known as a "regulated asset base model," which was used for other projects such as the Thames Tideway and has attracted staunch opposition.
It added any deal would be subject to approval on areas such as value for money and affordability.
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Last year, the government launched a consultation of the model and remains of the view that it may be the only plausible way to fund large-scale nuclear projects such as this.
In a statement released on Monday, the government said: “Consideration will be given to the potential role of government finance in construction, provided there is clear value for money for consumers and taxpayers, and subject to all other relevant approvals."
The deal comes as part of the long-awaited Energy White Paper, which UK officials claim could create as many as 220,000 jobs over the next decade. The paper plans out methods to cut emissions in industry, transport and buildings.
The government claims the deal should remove 220 million tonnes of emissions from the atmosphere, or the equivalent of 7.2 million petrol cars.
The government has also pledged to ban the sale of diesel and petrol cars by 2030.
Read more: UK to ban all sales of diesel and petrol vehicles by 2030
Boris Johnson's administration has also pledged to emissions by ensuring all UK homes are powered by offshore wind energy by 2030.
An Imperial College London report into wind power released in August also found that wind power farms are increasingly being funded via negative subsidies, which could go part way to massively reducing energy costs for consumers, or even causing energy bills to become cost-negative - effectively meaning companies will be paying consumers to use it.
It is unlikely this will apply to nuclear power at any point in the future, however.
The announcement of Sizewell C has met the ire of some environmental activists, who argue that wind and solar power are far cheaper and cleaner than nuclear energy.
Caroline Lucas, Green MP for Brighton Pavilion, told the BBC: "When renewables costs are plummeting, it's madness to waste £20bn on another nuclear white elephant.
"It will leave consumers with higher bills, destroy important habitats and unlikely to be online till the late 2030s."
Coincidentally, nuclear energy is often touted as being highly environmentally-friendly. However, if the reactors fail - such as with the Chernobyl disaster in 1986 or the Fukashima disaster in 2011 - it can result in serious environmental damage.
While waste volume with nuclear and fission energy is significantly reduced compared to other sectors, disposing of any waste in the industry can often prove problematic, generally involving storing it for the tens of thousands of years it will need to decay.
With the projected £20 billion costs for Sizewell C and Hinkley Point C - EDF's other nuclear project, being constructed in Somerset - currently clocking in at an estimated £22.5 billion, the environmental activist's concerns are valid.
Conversely, nuclear industry officials are likely to be delighted with the news after waiting such a long time to finally retire Britain's ageing reactors.
Several other companies have attempted to invest in nuclear plants on the British Isles in recent years but have pulled out.
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Sizewell C is expected to be a near-replica of Hinkley Point C but the French firm has confirmed it will not undertake other construction projects using the same funding model.
The government confirmed that successful negotiations with EDF will depend on the success of Hinkley Point C and the application of its lessons learned into the new project.
Business and Energy Secretary Alok Sharma told the BBC's Today programme: "We are starting negotiations with EDF, it is not a green light on the construction. The wind doesn't always blow and the sun doesn't always shine."
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