Financial support for nuclear lifetime extensions

Overview

Nuclear generation plays a key role in the UK’s energy mix, supplying baseload, low carbon energy to millions of homes and businesses. Continuing supply from nuclear plants can support our Net Zero ambitions, whilst supporting a lower cost system.

As the UK looks ahead to the additional supply from new nuclear projects such as Hinkley Point C (HPC) and Sizewell C (SZC), it is important that existing generation can be maintained wherever it is feasible and safe to do so. International best practice shows that in many cases, eligible operational nuclear plants can continue operating beyond their initially anticipated lifetime with appropriate investment.

Given the changing electricity market over coming decades, there may be circumstances where it is necessary for HMG to support the works required to extend the lifetime of operating nuclear plants to ensure their continued supply of electricity to the grid for prolonged periods. Capitalising on existing infrastructure and operating nuclear assets in this way can deliver value for money for consumers and benefits to the supply chain.

Contracts for Difference (CfDs) are tried and tested mechanisms designed to encourage investment into low carbon technologies, utilised across the energy sector. HPC has its own bespoke CfD.

This consultation seeks views on amending the CfD legislation to enable existing nuclear generating assets to be eligible for CfDs as a way of incentivising investment into lifetime extensions of operating nuclear plants, subject to all value for money considerations and relevant approvals.

Read the consultation document on GOV.UK.