UK government to change the rules – so that billions of pounds of pension funds can go to dodgy new nuclear projects
Pension fund reforms will help to unleash wave of investment in nuclear energy, according to senior industry sources. The Chancellor, Kwasi Kwarteng, announced a plan on Friday to unlock billions of pounds of cash that could be poured into major infrastructure programmes and innovative businesses. The Government is scrambling to get energy projects off the ground following the Russian invasion of Ukraine.
French state energy giant DF is developing Sizewell C and has received UK Government backing. But
the project still needs to drum up billions of pounds in private investment. Kwarteng’s plan will relax rules in order to allow fund managers to invest in assets that will potentially take a long time to make a return.
Details of the changes are likely to be closely monitored by regulators and pension campaigners. Tom Greatrex, chief executive of the Nuclear Industry Association, said pension money ‘will be a boost to the
prospect of getting new nuclear plants built to fix our energy security crisis’, adding: ‘The first big infrastructure project where this will have an effect could well be Sizewell C.’ He said it was a ‘very important step’ alongside two other major changes that are shaking up the industry.
The first is a new financing model, called the ‘regulated asset base’, which allows investors to receive returns during the construction phase of big projects.
The second is a planned rebranding – expected later this year – of nuclear as green energy, which it is hoped will attract backers that are currently barred from putting money into the sector. Kwarteng’s plan
could also help spur funding for a fleet of mini nuclear reactors being developed by engine maker Rolls-Royce. A spokesman for Rolls-Royce said: ‘This broadens the pool for vital UK infrastructure funding. SMRs are perfectly sized for pension investment owing to the lower project costs of around £2billion.
Mail on Sunday 24th Sept 2022
Posted by Christina Macpherson |
politics, UK
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