The current government efforts to build new nuclear power plants across the UK could potentially add to energy costs for consumers, according to ministers. A new reactor could likely add at most a few pounds a year to typical household energy bills during the early stages of construction. However, it is claimed that households will pay less than £1 a month extra on average over the entirety of the construction period.

This news follows on from an announcement from Kwasi Kwarteng to the BBC in which he suggested there may be a small effect on consumer bills under a new funding model. He went on to say that ‘nothing should be taken off the table’ to ease pressures on the cost of living, with a windfall tax on excess profits of oil and gas companies a hot topic. These statements were made as he visited North Wales, a location that the government has pledged to build a new nuclear power station at. More specifically, Wylfa on Anglesey. A previous plan for a nuclear power station here collapsed in 2020 but Boris Johnson has since set his sights on reviving this plan as fast as possible.

This comes off the back of the current energy crisis, which has caused a switch up in government strategy, now focussing on investing in nuclear power as one of a few key areas. The UK also plans on reducing reliance on oil and gas by investing in alternative sources of energy, including nuclear, wind, and hydrogen power.

Kwasi Kwarteng has gone on to outline the ambition to deliver up to eight new nuclear reactors by 2030, including two at Sizewell (Suffolk). This will help to deliver on the goals of supplying 24 GW of electricity by 2050 – roughly a quarter of the UK’s predicted energy demand. Although it is not a perfect solution, Mr Kwarteng has stated that he believes it to be part of the solution.

Although Mr Kwarteng has said that nuclear is back on the table due to the ability to provide more decarbonised power and a sustainable energy source, the building of new plants can be vastly more expensive than renewables – sometimes taking decades to build. A recent law change means that nuclear reactors can be funded in part by adding a small levy to people’s bills during their construction.

A Nuclear Concern

Companies have previously pulled out of plans to build new nuclear reactors, most relevant of which would be Wylfa on Anglesey. As reactors take so much time and money to build, the concern has almost always centred on the hefty financial risk. The government has decided the most apt way around this is to raise necessary funds through levies on consumer bills, effectively sharing the risk with the British public.

The argument of it only adding a few pounds a year to energy bills during construction is made, but the spiralling energy bills have brought this under scrutiny. The concern of nuclear projects running well over their budget and timescale remains, with ministers throwing their full weight behind nuclear projects as part of the new energy plan.

There are further plans to expand offshore wind farms and more controversially, North Sea Oil and Gas. Cheaper energy bills have been offered to those who live near new onshore wind farms but not for nuclear. It is hopes that this will lead to savings for consumers in the long run, as developers will have more money upfront and are less likely to take out loans.

Critics have been vocal in their belief that this will shift the risk of building new reactors on to the consumer, without a real understanding on how long projects will truly take or cost. However, Mr Kwarteng and the current government believe this to be worth the political gamble…

Support For Nuclear?

The government’s own research into public attitudes show that 86% of people support renewable energy, while only 37% support nuclear. This is in part due to lingering misconceptions about the industry, but mostly due to high expenses and uncertainty. For example, Hinkley C is expected to cost around £22-26 billion.

When quizzed on the lack of public support for nuclear, Mr Kwarteng suggested that ‘nuclear’s more popular now than it’s been for a while.’

He cited two main reasons why the public wanted to see more nuclear power in the UK, security of supply here in the UK and referring to ‘firm’ power.

“What that means is, if you look at renewables the sun doesn’t always shine, and the wind doesn’t always blow… The great thing about nuclear power is that it’s continuous power.”

Customer Billing – Will I Be Affected? 

     As already mentioned, energy costs are spiralling – and the price rises are affecting all of us. For UK energy customers it is difficult to say how your bills will be affected due to the serious volatility in the energy markets. It is important to remember that energy prices as a whole are rising, and this will be passed onto consumers through energy bills, making it something to keep a close eye on.         

  Different suppliers will feel the pinch in different ways so it is crucial to be aware of the current situation your energy supplier finds themselves in. It is possible to view up to date supplier profiles with any recent changes for all of the energy suppliers in the UK, here.      

    At a time where bills look set to rise due to market volatility, it is also a good idea to ensure that you are not being overcharged for any of your utilities. It can be a tricky task to navigate but there are free online tools to remove the hassle available.      

  You can find a free online Gas Bill Calculator to see if you are being overcharged, here.        

You can find a free online Electricity Bill Calculator to see if you are being overcharged, here.        

     Energy Solutions by Us, for You         

At a time of great uncertainty in global energy markets, it is easy to feel lost in it all.    

       Keeping up to date with developing situations and the associated ramifications is a tricky and time-consuming job. It is also one that is not likely a priority for you and your business.       

  So, what do you do?        

  You partner with energy procurement experts to take the load off of your desk.       

   Energy Solutions have been trusted brokers for countless businesses for over twenty years, which means we know how to navigate the energy markets during a time of uncertainty.       

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