Poor households face the obligation to help pay the bill for the construction of Sizewell C | Energy industry

The UK government has been criticized for exposing low-income households to the cost of building the Sizewell C nuclear power station while leaving factories ‘off the hook’ as a crucial planning decision is expected this week.

If given the green light, the government hopes to use a regulated asset base (RAB) financing model to fund the project, which is being offered by French energy company EDF.

RAB reduces the risk for investors, who will receive regular payments before the project starts producing electricity. However, this also means that customers pay construction costs due to higher energy bills.

A consultation on the use of the RAB model is due to close next month and shows operators in energy-intensive industries would be exempt, but households with universal credit would have to pay.

During the consultation, officials said the exemption for electricity-intensive users – such as factories – would avoid the risk of putting them at a “significant competitive disadvantage” when operating in international markets, as they might have to add the costs to the price of their products.

MEPs had suggested that electricity suppliers should be prevented from recovering the costs of their RAB payment obligations from consumers benefiting from universal credit.

However, officials dismissed the idea, saying such a measure could “deter vendors from engaging in commercially advantageous practices” such as payment plans and loyalty benefits to attract customers. They also argued that other vulnerable consumers not claiming Universal Credit could also be affected by the decision.

Greens MP Caroline Lucas said: ‘When energy bills are skyrocketing in the midst of a cost of living scandal, the last thing people can afford is the skyrocketing cost of elephants embryonic nuclear whites like Sizewell C.

“Not only are these projects extremely expensive to build in the first place, with Hinkley Point C now at £26bn without having generated a single watt of power, the RAB business model passes that huge upfront cost directly onto the consumer. So that giant corporations are spared generous exemptions, the poorest in society will foot the bill.Nuclear is too slow, too expensive and the wrong priority.

The 3.2 gigawatt plant at Sizewell in Suffolk could be able to generate electricity for 6 million homes and is part of a plan to approve a nuclear reactor every year by 2030.

Alison Downes, from the Stop Sizewell C campaign, said: “Taxes of all kinds hit the poorest the hardest and this nuclear tax is no exception. Multi-million pound businesses will be spared if they use a lot of energy, but a family on Universal Credit struggling to pay their heating bills will have to cough up to pay for an unwanted nuclear power station.

The Department for Business, Energy and Industrial Strategy (BEIS) said the government considered it very important to support low-income households, but believed that “support for vulnerable groups would be best addressed from holistically” looking at the factors that increase energy bills.

BEIS estimated that Sizewell C would add an extra £1 per month to household bills to help with building costs. But research from the University of Greenwich Business School seen by the Guardian shows the average monthly cost could be as high as £2.12.

In January, the government earmarked £100million to move Sizewell C through to the next stage of negotiations and help the project attract new private investment. In May, she pushed back the deadline from May 25 to July 8 for a decision on a “development consent order” for Sizewell C.

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Ministers have instructed Barclays to conduct a search for investors to back the project alongside the state and EDF, who each plan to take a 20% stake. The structure would force CGN, the state-backed Chinese nuclear specialist that owns a 20% stake in the Sizewell C.

According to the Sunday MailBritish Gas owner Centrica is considering taking a stake.

CGN has partnered with EDF on Hinkley Point C in Somerset – which has been delayed and is over budget – but ministers want to avoid further Chinese involvement amid deteriorating UK-China relations.

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