New research from economics consultancy firm Oxera has determined that a programme of building new nuclear power stations in the UK would only be economically viable with financial support from the government.
Oxera argues that the economics of private sector investment are far from attractive and it backs this assertion with its analysis which shows that, by 2025, a new-build nuclear programme based on eight 1 GW reactors would generate 22% of UK electricity. However, according to Oxera’s modeling, industry could expect a return on equity of only around 11%, not be enough to finance new nuclear build.
Government capital grants and debt guarantees are two of the support options that could make investment in a nuclear new-build programme viable, according to the report.
