The government plans to take a 20% stake in a new nuclear plant in Suffolk in a move to bolster the country’s energy security against a backdrop of global instability and a cost of living crisis.
The French power giant EDF is also to take a 20% share in the delayed £20bn Sizewell C project.
Ministers hope the confirmation of two key backers in the scheme will encourage other investors to come forward.
Steps are being taken at Westminster to put the financing of nuclear on a firmer footing
The move comes as Boris Johnson is due to publish a British energy security strategy.
The prime minister has argued that investing in domestic nuclear and renewable power will be central to ending the reliance on fossil fuels and establishing a standalone energy policy as the country seeks to move away from Russian oil and gas supplies following the invasion of Ukraine.
Legislation is currently going through Parliament aimed at putting the financing of next-generation nuclear plants on a firmer footing.
The Nuclear Energy (Financing) Bill would allow pension funds and other institutional investors to provide cash for power stations through a so-called regulated asset base funding model.
Energy bill payers would also contribute towards the cost of new power stations during construction through their bills, with the aim of giving private investors greater certainty after projects such as Sizewell C and Wylfa Newydd in Anglesey have stalled due to worries about the financial risks of construction.
Ministers have indicated the levy would add around £1 per month to household bills, but in the face of the current squeeze on family budgets, fuelled by spiralling energy prices, they say an exemption will be considered, aimed at protecting the poorest.
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Meanwhile, a member of the cabinet has indicated people living near new onshore wind farms could see their energy bills cut.
But Education Secretary Nadhim Zahawi said any new developments had to be supported by local communities.
People living near new wind farms could see their bills cut, it has been indicated
He told Sky News’ Sophy Ridge On Sunday programme: “I would say that if we are going to make sure that we carry the will of local people, whether it’s onshore wind or nuclear, we have to learn from how it’s done well in other countries.
“The way you do that is to make sure the local community has a real say.
“But also we’ve seen great examples of other people where if they build a nuclear power station, within a certain radius of that power station they get free power.
“So it’s right to look at innovation to make sure we wean ourselves off hydrocarbons, we have to do that, we have to do that well, part of that is making sure we look after the will of the local people.”
