The Hinkley Point C nuclear power plant under construction in Somerset is the UK's first new nuclear power plant. Credit: Finnbarr Webster/Getty Images < p>The Gulf states are ready to help fund the UK's efforts to build new nuclear power plants to keep the light on, the Energy Security Secretary said.
Grant Shapps visited the region in January and said he is in “constant contact” with investors in the region who are “very interested” in the nuclear industry. Countries such as the UAE and Bahrain have created vast sovereign wealth funds that are now pushing for clean energy amid global efforts to reduce fossil fuel use.
In February, Chancellor Jeremy Hunt met with the UAE sovereign investment company Mubadala and abandoned plans to tighten tax rules for sovereign wealth funds.
Mr Shapps said: “I have been to the Gulf States [this year] and I am constantly in touch with our friends and colleagues there.
“They have already invested heavily in renewable energy and are also very interested in nuclear power. The scale of their ambition is quite large – look at this space.”
Ministers are trying to attract investment for the planned £20bn EDF power plant sterling in Suffolk, as well as other nuclear projects to promote carbon-free energy.
They want nuclear to account for about 25 per cent of Britain's electricity by 2050, compared to 16 per cent now. Several aging nuclear facilities are expected to close in the next few years. However, obtaining investment is difficult due to investor wariness about the high costs and risks of nuclear accidents, as well as geopolitical concerns.
Legal Information & General, the UK's largest wealth manager with £1.3 trillion in assets, said it was focused on supporting other “viable and cost-effective” clean energy solutions.
To French state energy giant EDF owns the British nuclear fleet, but will need outside investors to build the planned Sizewell C project in Suffolk.
The government and EDF pushed China's CGN out of the project due to concerns about China's involvement in critical national infrastructure.
Energy Minister Grant Shapps hinted that the Gulf states could provide funding for the deployment of British nuclear power. Photo: Dale Cherry However, Mr Shapps did not rule out any future Chinese investment in the nuclear sector.
“We bought them from Sizewell C because we didn’t want this situation to continue,” he said. “But we will always look at each individual investment on an ad hoc basis and its value to critical infrastructure.”
CGN remains EDF's minority partner in the new Hinkley Point C power plant they are building. Somerset, the UK's first new nuclear power plant in a generation.
It was originally supposed to cost £18bn and go online at the end of 2025, but its budget has grown to £25-26bn in 2015 prices, or possibly £33bn in today's money adjusted for inflation.
The launch date has been pushed back to June 2027 and any further delays could jeopardize the security of the UK's electricity supply as other stations will be closed by then.
Any cost overruns at Hinkley Point C are borne by developers, but under Sizewell C's funding model, consumers will share the risk.
Speaking during a visit to Hinkley Point C last week, Mr. Shapps said that Sizewell C would be “a carbon copy” of Hinkley, adding: “In theory at least, this should lead to a much faster and therefore less expensive build.” .
During the same visit, French Energy Minister Agnès Pannier-Runachet said that Sizewell C will be an impetus for clean energy supplies and that “it's really important that we get this project done in a timely manner.” .
The Treasury plans to classify nuclear power as a green investment to help raise cash from environmentally conscious investors. But when discussing energy policy more broadly, Mr Shapps said he did not want to also classify natural gas as a green fuel to help attract investment.
He added that he was “not bothered at all” by the shutdown of two coal-fired power plants in March, despite asking them to consider staying online for backup power.
“If we survived last winter, we will definitely survive the coming one,” he said.
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