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AUTOMOTIVE & TRANSPORTATION | Transportation Services / Infrastructure Management Services
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About Tideway

Tideway finances, builds, maintains, and operates the Thames Tideway tunnel. The company specializes in waste water services, engineering, civil engineering, and infrastructure. It is based in London, England.

Tideway Headquarter Location

Cottons Centre, Cottons Lane

London, England, SE1 2QG,

United Kingdom

Latest Tideway News

Tideway funding model could save nuclear power industry

Oct 27, 2021

34 minutes The government is looking to adopt the mechanism used to pay for the Thames Tideway super sewer to rescue plans to construct more nuclear power plants. A regulated asset base (RAB) funding model could revive plans for a new nucelar plant on the island of Anglesey The Nuclear Energy (Financing) Bill, currently in Parliament, will have a new section added to introduce a regulated asset base (RAB) model as an option to fund future nuclear projects. Under this model a company receives a licence to charge a regulated price to consumers. The model enables investors to share some of the project’s construction and operating risks with consumers, lowering the cost of capital. The RAB model differs from the contract for difference (CfD) approach that was used to finance Hinkley Point C. With the Hinkley CfD, the developer agreed to pay the entire cost of constructing the plant, in return for an agreed fixed price (often referred to as the ‘strike price’) for electricity output once the plant is online. This is ultimately funded by consumers, who will pay the difference between the wholesale electricity price and the final strike price, but consumers do not start paying until the power station is up and running. In contrast, the RAB model – which was also used to finance the construction of Heathrow Terminal 5 – shares the cost with consumers from the start, reducing the amount of interest owed on loans. Unlike a CfD where construction risk sits with the developer, an RAB model enable some level of risk-sharing between investors and consumers. The RAB model will require consumers to pay what the government describes as “a small amount” on their bills during the construction of a nuclear project. These payments avoid the build-up of interest on loans that would ultimately lead to higher costs to consumers once the plant is in operation, it is argued. The Department for Business, Energy & Industrial Strategy (BEIS) said: “Our analysis has shown that using the RAB model should produce a cost saving for consumers of between £30bn and £80bn compared to funding it through a Hinkley Point C style CfD scheme.” BEIS still defends the use of the contract for difference mechanism for Hinkley Point C It says that the deal agreed in 2016 “was the right deal for the right time”. However, it recognises that placing the entire construction risk on developers was what ultimately led to the cancellation of Hitachi’s project at Wylfa Newydd in Anglesey and Toshiba’s at Moorside in Cumbria. Got a story? Email news@theconstructionindex.co.uk

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