Finance for the development of new nuclear plant

Our finance team has long experience of funding multi-billion-pound infrastructure projects.

The biggest obstruction to the development of a nuclear power station is regulatory. The second is finance.

The attractions of building small reactors in a factory are obvious – engineering and safety standards on a production line will be much easier to control than on an open site. The faster speed of construction of a small reactor is also material: capital is tied up for less time, which lowers its cost. The greatest benefit of small reactors, however, is their financial scale.

UK banks will not take risk on nuclear construction, whatever the guaranteed income, meaning that any new nuclear power station has to be built using equity. Once finished and proven the banks will refinance the project.

The cost of a large reactor is beyond the financial means of any UK corporation. A small reactor, however, is affordable by UK utilities and financial investors, which creates the possibility of the private sector leading a nuclear project for the first time in the UK. Economies of scale need not be lost because more than one reactor can be built at one site, each being installed and completed in sequence, but with a much lower capital requirement at any time than for a giant project.

KAERI have spent well over £200million developing the SMART. A cost-analysis of building the first SMART power station has been undertaken by their US-based consultants. This study estimates first-of-a-kind costs for a two-reactor 200MW project at roughly £1billion. We are refining the figures for the British project.

The government has announced a grant of £250million for the development of a small reactor in the UK. If that is awarded to GF Nuclear we will not only pass a Generic Design Assessment, we will build the first reactor. Unlike all our competitors we do not need any money to undertake detailed design work – that is already done.

Wind and solar power is useless when it is most needed – on cold still winter nights. Consumers pay for wind and solar power in two ways: as a direct subsidy per MWh of generation and in payments to fossil-powered stations to resolve the problems that renewables cause. In the UK, clean energy means nuclear energy. From next year virtually every power station in the country of every type will receive a subsidy from the consumer. The much-derided £92.50 per MWh being offered to the French state-owned EDF to build Hinkley Point C nuclear power station is actually less than is offered to an offshore wind farm in direct subsidies and much less when other costs to consumers are taken into account.

As a private-sector company we bring a new dynamic to the nuclear market. The directors of GFN are also its shareholders. We have all risked our own capital in our project and it matters to us very much indeed that the project is on time and within budget.