But the RAB model is not without problems. It effectively shifts the risks from the developers to the taxpayer, who helps pay towards the project in advance through utility bills. And history has shown that nuclear power plants are rarely constructed on time and on budget.
The best solution might be a combination of the government taking an equity stake in a project, such as 10pc, from which it will generate a return when the power plant is fired up, and private investment through the RAB.
“I suspect we will end up with something that has features of both,” says Greatrex. “From industry’s point of view we know the current model doesn’t work.”
The short answer is Sizewell C, in Suffolk, where EDF and CGN are seeking permission to build two new reactors that would be a replica of Hinkley C. EDF argues that dovetailing the two builds would bring down costs significantly because it would allow it to move all the people and expertise from one site to another and to keep supply chains mobilised.
However, the Government is unlikely to make a decision on Sizewell C any time soon. As one industry insider puts it: “While there are these reports that nuclear will be given the green light, there are two important things to bear in mind: the funding arrangements have not been worked out and agreed yet and the planning process for Sizewell C is still going on and that is going to take some time to complete; the planning decision might not come until the beginning of 2022.”
Moreover, the fact that France’s EDF and China’s CGN are the only players left in the market might be a worry for the Government. Toshiba abandoned plans for a new station in Moorside, Cumbria in 2018 and Hitachi finally ditched plans to build a new nuclear power station at Wylfa in Wales in September.
China is another thorny issue for the Government. In addition to its investments in Hinkley and Sizewell, CGN is looking to build its own reactor in Bradwell in Essex, a copy of a Chinese design. Unfortunately for the Government, CGN is the only company, apart from EDF, willing to take on a project like this.
Whether or not the Government will allow a company owned by the Chinese state to build and run a nuclear reactor on British soil is questionable.
That said, like Sizewell, a decision on Bradwell does not need to be made any time soon. CGN is three and half years through a five-year regulatory approvals process and a lot can change in that time.
“If the Government pulls out of Bradwell now, the Chinese could pull out of Hinkley and leave that with a funding gap, so why would you run the risk at this stage when you don’t need to?” says one person close to the company.
“I think we might just see the Government making a commitment for the need for big nuclear alongside small modular reactors.”
What about natural gas and carbon capture and storage?
The UK cannot rely on natural gas to reach net zero, as it emits pollution. Carbon capture and storage has potential, but as yet it is unproven and expensive. “The technology has been considered in the past but failed to achieve any real success,” says Eager.
There are now other emerging technologies that could be looked at with more seriousness than in the past, such as energy storage through batteries, biomass, biogas and hydrogen.
“Our recent analysis indicates that energy storage will be more competitive on cost than gas by 2030 so has to be considered seriously as a flexible asset,” says Eager. “There are a lot of moving parts to consider.”