UK’s nuclear power push may add to energy bills, minister says

The UK government's efforts to build new nuclear power plants may increase people's energy bills in the short-term, the business secretary has told the BBC.

Kwasi Kwarteng said there might be a "small effect" on bills under a new model to fund nuclear projects.

But he said in the long-term, nuclear would provide cheaper power and energy security.

He said financial help had been offered to reduce bills in the short-term.

Mr Kwarteng said "nothing should be taken off the table" to ease pressures on the cost of living, including a windfall tax on the excess profits of oil and gas companies.

The BBC spoke to Mr Kwarteng as he visited north Wales on Thursday, where the government has pledged to build a new nuclear power station at Wylfa on Anglesey.

A previous plan for a new nuclear power station at Wylfa collapsed in 2020, but last month, Prime Minister Boris Johnson said he wanted to revive the idea "as fast as possible".

Investing in nuclear power is one of the key focuses of the government's energy strategy, released in April.

The government plans to reduce the UK's reliance on oil and gas by investing in alternative sources of energy, including nuclear, wind and hydrogen power.

The strategy contains an ambition to deliver up to eight new nuclear reactors before 2030, including two at Sizewell in Suffolk.

The government wants nuclear to supply 24 gigawatts (GW) of electricity by 2050 - about 25% of the UK's predicted energy demand.

Mr Kwarteng said he thought investing in nuclear was "part of the solution" to the UK's energy needs.

He said "nuclear is back on the table" because it provides more decarbonised power and a sustainable energy source.

But building new nuclear power plants can be vastly more expensive than renewables and can take decades to build.

A new law means new nuclear reactors can be funded by adding a small levy to people's bills during their construction.

The government says this will lead to savings for consumers in the long run, as developers can have more money upfront, and are less likely to take out loans.

But critics argue this shifts the risk of building new nuclear reactors onto the consumer, without knowing how long projects will take or how much they will cost.

When asked whether putting bills up in the short-term was worth the political gamble, Mr Kwarteng said: "Absolutely. People here really want to see new investment, jobs, opportunity for their kids and their community."

Nuclear plants are extremely expensive to build, although the overall cost is comparable to other forms of power.

Hinkley C - the newest of the UK's planned nuclear power stations - is expected to cost £22-26bn.

When asked if he thought the public supported investment in nuclear, the business secretary suggested "nuclear's more popular now than it's been for a while".

He said there were two reasons why we want to see more nuclear - "security of supply here in the UK" and "what experts call firm power".

"What that means is, if you look at renewables the sun doesn't always shine, and the wind doesn't always blow," he said. "The great thing about nuclear power is that it's continuous power."

In a community like Wylfa, he said, "there's actually broad public support".

"Now the nuclear power won't be everywhere in the UK, it will only be on sites where there is a history, a tradition."

The government's plan for a new nuclear power station at Wylfa has split opinion among local people.

Jo Fosbrook, a local holiday business owner, said she reluctantly accepted that investing in nuclear power was necessary.

"You can't say, 'that I don't want nuclear power', because what else are you going to have?" she said. "What are you going to say to everybody, have a candle on in the eve instead?"

But Emlyn Richards, a retired Methodist minister, was less keen on the idea, expressing a preference for renewable sources of energy.

"Anglesey is noted for its wind," he said. "Why don't they harness that and turn it to power".

He said Wylfa was the "most beautiful spot on the island". "I don't want them to spoil that beauty for the generation that's coming after us," he added.

As part of its plan, the government opened a £120m fund designed to stimulate the development of nuclear technologies on Friday.

As well as large, traditional nuclear reactors, the government is also supporting the development of small nuclear reactors (SMRs), which are smaller and can be assembled in factories - making for a simpler construction project.

Tom Samson, CEO of Rolls Royce SMR, who wants to build some in the UK, told the BBC they hoped to finance their SMRs through a combination of private financing and government support.

Mr Samson said: "Generating electricity from nuclear is a much better way to keep consumers' costs as low as possible."

He added the government's model of funding nuclear projects, which can add levies to people's bills while they are in construction, would reduce the costs of delivering nuclear projects.

"We have to finance the build and we have to find ways to finance that build most economically," he said.