Nuclear Energy (Financing) Act 2022 And The Prime Minister's Energy Security Strategy, April 2022

• Published date: 13 April 2022
• Subject Matter: Government, Public Sector, Energy and Natural Resources, Energy Law, Oil, Gas & Electricity, Government Contracts, Procurement & PPP
• Law Firm: Gowling WLG
• Author: Mr Andrew Newbery, Robert M. Armour and Paul Green

The Nuclear Energy (Financing) Act 2022 received Royal Assent on 31 March 2022 (c. 15)¹. The Act was designed to facilitate investment in new nuclear power stations, supporting the delivery of the Government's commitments made in its 2020 Energy White Paper and in the Prime Minister's Ten Point Plan², and thereby 'contributing to the Government meeting its legally binding³ obligations to achieve net zero carbon emissions by 2050'.

Days after the Act received Royal Assent, the Prime Minister launched the British Energy Security Strategy⁴. This Strategy includes new nuclear generation "ambitions" such as:

• To establish a Great British Nuclear ("GBN") vehicle by the end of the year. The GBN will be tasked with helping projects through every stage of the development process and developing a resilient pipeline of nuclear generation new builds.
• To have up to eight new nuclear reactors "progressed" by 2030. It is not clear whether this is in addition to the two reactors planned for Sizewell C (SZC) mentioned below, each of 1.6GW. The GBN will have a key role here, with the expectation that a selection process will be kicked-off in 2023, with the intention that the Government will enter negotiations with the most credible projects as soon as possible.
• To have up to 24GW of installed nuclear generation capacity (25% of total GB demand) by 2050 - almost twice that of the peak year in 1995.
• To develop an overall siting strategy optimizing the use of the UK's existing eight designated nuclear sites: Hinkley Sizewell, Heysham, Hartlepool, Bradwell, Wylfa, Oldbury and Moorside. The Wylfa site is singled out in the Strategy for special mention, underscoring that credible negotiations are already underway with Bechtel and Westinghouse for a new nuclear generation project on this site⁵.

The Strategy also re-states existing Government commitments to new nuclear generation, including the Government's commitment:

• To provide up to '1.7 billion of direct government funding to enable one large-scale nuclear project to Final Investment Decision (FID) this Parliament (i.e. before May 2024) Since there is only one project that could realistically achieve this milestone, this must be a reference to up to '1.7 billion of funding for SZC; perhaps as part of the Government's expected 20% equity stake in the project⁶.
• To provide a further '100 million to SZC to help it develop the project.
• To invest '210 million for the development of Small Modular Reactors (SMRs) with Rolls Royce.
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