The government has taken a Final Investment Decision on Sizewell C, saying the 3.3GW, £38 billion (in 2024 prices) plant will be in operation ‘in the 2030s’.
The government will take an initial 44.9% stake to become the single biggest equity shareholder in the project. The other shareholders are La Caisse with 20%, Centrica with 15%, Amber Infrastructure with an initial 7.6% and EDF with 12.5% stake. It said alongside this investment, the National Wealth Fund is making its first investment in nuclear energy by providing the majority of the project’s £38 billion debt finance, working alongside Bpifrance Assurance Export. Investors do not have an obligation to fund the project if the costs pass £47 billion, the FT reports, and in that event the government could decide either to provide additional funding or scrap the project and compensate investors. The investors will be rewarded if the project costs less than £40 billion.
In its value for money (VFM) assessment, the government said new nuclear capacity was required beyond Hinkley Point C and SZC is “by far the most mature new nuclear project in development” and an “above-ground replica” of HPC. The need to reach net zero by 2050, and predicted increases in electricity demand, “require a significant increase in the provision of low-carbon electricity”. Although “the vast majority of future power generation will come from renewable sources”, it said analysis demonstrates low-carbon technologies such as nuclear are required in tandem to lower the overall cost of the electricity system.
It said large nuclear plants have characteristics that mean the market is likely to underinvest in them without government intervention, and there is “is a clear case for government support for nuclear to overcome persistent market failures and barriers to investment”. It added, “there are only a limited number of institutions with sufficient capital and expertise to invest in projects of this scale. The RAB and GSP enable the project to attract private investment and demonstrate an investible asset class”.
It estimated the cost to consumers, using the Regulated Asset Base (RAB) model, will average of £1 a month on a typical household bill through the construction period (post-recycling, real £2025).
Assessing the cost of SZC against various counterfactuals including additional onshore wind and offshore wind, supported by flexible sources of power, it said, “Although the capital costs it adds to the system are higher, these are outweighed by the benefits of reduced network, interconnector and balancing costs”.
It said the construction-ready design and standardised supply chain were “critical aspects of reducing the risk of schedule and cost overruns of new nuclear projects” and experience at HPC will enable “a more mature starting position on schedule and cost” for SZC .
The VFM assessment said the plant will have the technical capability to operate flexibly, including load-following and using excess heat for other purposes (such as hydrogen production).
Other non-monetised benefits claimed in the assessment were developing and maintaining the UK’s nuclear supply chain and skills base expertise, which it said would reduce the schedule and cost of building future nuclear plants, and proving a new financing model