Energy bills in Scotland set to rise to finance England’s nuclear power plants

The increase in bills will be a direct consequence of the UK Government’s decision to use a Regulated Asset Base (RAB) funding model in their plans to license up to eight new nuclear plants south of the Border by 2030.

READ MORE: What is RAB and how will it affect future energy charges for Scots?

Scots could see their energy bills rise by around £100 every year (extrapolating from UK Government estimates) collectively and eventually coughing up more than £2 billion.

However, former chief statistician at the Scottish Office Jim Cuthbert – the author of a new report for Jubilee Scotland and the Common Weal think tank on RAB funding and nuclear power – warned that “nobody knows” how much energy bills will go up.

Jim Cuthbert, author of the 'Economic Policy Options For An Independent Scotland'

Bills will rise due to the RAB model, which will see “relevant licensee nuclear companies” paid levies by electricity suppliers, who will then be allowed to pass the costs on directly to their customers.

The UK Government has said the model is key to its “ambitions for a British nuclear renaissance … boosting UK nuclear power capacity up to 24GW by 2050”.

However, energy bill payers in Scotland – where the SNP/Green government remains opposed to any new nuclear projects – will not be exempt from paying these increased costs in order to fund projects in England.

The UK Government estimates that the addition to energy bills will be “on average around £1 per month” per project, at least during the “full construction phase”.

If all eight planned nuclear licences are granted, a Scottish household could be paying £96 on top of their standard energy bills every year.

Across some 2.53 million households in Scotland, consumers would be footing an annual bill of more than £242m.

According to a 2012 paper from the Imperial College Centre for Energy Policy and Technology (ICEPT), the median length of the “full construction phase” of a nuclear plant outside Asia is 8.3 years.

This means that Scots could face a collective charge of more than £2bn through RAB payments to English nuclear projects.

However, Cuthbert warned that the scope for further inflation of cost would be “immense”, and that equity owners would have “every incentive” to increase the RAB payments they receive “as much as possible.

“The resulting large excess profits, and unduly high customer charges, are obvious,” he wrote in the Common Weal report, adding: “Witness the dividends extracted from the English water companies, or the fact that the UK has some of the highest rail fares in Europe.”

Craig Dalzell (above), the head of policy and research at the think tank, said people in Scotland would be “made to pay for expensive and risky nuclear power, made even more expensive and more risky by this dangerously flawed funding model”.

“An advantage of independence is that Scotland would be able to develop our renewables more rapidly, lower energy bills for Scottish consumers, and even export cheap electricity to people living in the remainder of the UK,” he added.

Alan Brown MP

The SNP’s energy spokesperson, Alan Brown MP, said it was not the first time that Scotland would be “forced to pay the price for Westminster’s nuclear obsession”.

He went on: “Far from offering proper support to the households that need it most, the UK Government, or what’s left of it, seem determined to pass down the costs of unnecessary nuclear stations to struggling Scottish families.

“It is not just the up-front costs that is a concern.

“All risk on project overruns move to the taxpayer and worst of all, the UK Government’s own estimates have the total capital and borrowing costs as high as £63bn for one new nuclear power station.

“Scotland could do so much better with investment in newer renewable technologies like floating offshore wind and tidal stream, as well as green hydrogen production.”

Maggie Chapman, the Scottish Greens’ MSP for North East Scotland, said there were “big questions to be asked about any scheme that sees people in Scotland funding the expansion of nuclear power in England, even when our government’s position is rightly against it”.

She went on: “Nuclear power is a totally unnecessary and dangerous backward step.

“It is costly and insecure, and leaves a toxic legacy that will be with us for centuries.

“What we need is proper investment in renewables, which will help us to tackle the climate emergency, drive down energy prices, and ensure we never have to rely on the nuclear industry or human rights abusing regimes like Putin’s Russia for our energy security.”

The UK Government did not respond to the Sunday National’s requests for comment.

Cuthbert’s report for Common Weal, entitled Nuclear RAB: Another Aspect Of Johnson’s Toxic Legacy, can be read in full on the think tank’s website online at: www.commonweal.scot.