UK government earmarks funds for progressing nuclear project

In a statement about the measures announced yesterday by Chancellor Rishi Sunak in the autumn budget and spending review, the government said it would provide "up to GBP1.7 billion of direct government funding to enable a large-scale nuclear project to reach a final investment decision this parliament, subject to value for money and approvals."

In December 2020, the UK government announced it would begin talks with EDF Energy to enable investment in the planned Sizewell C nuclear power plant project. The latest government statement confirmed these negotiations are ongoing.

Other measures announced include GBP6.1 billion to back the Transport Decarbonisation Plan, boosting the number of zero-emission vehicles, helping to develop greener planes and ships, and encouraging more trips by bus, bicycle and foot. Sunak also confirmed funding for the GBP1 billion Net Zero Innovation Portfolio - as announced in Prime Minister Boris Johnson's Ten Point Plan for a Green Industrial Revolution, released in November 2020 - which is accelerating near-to-market low-carbon technology innovations and the aligned GBP385 million Advanced Nuclear Fund, which is developing the next generation of small and advanced modular reactor technologies.

The announcement was welcomed by UK trade body the Nuclear Industry Association. Tom Greatrex, the organisation's chief executive said: "This is a big vote of confidence in nuclear and a historic step forward for nuclear investment, with new money for a large-scale project, alongside money for modular reactors to enable future projects.

"We can't get to net-zero without investing in new nuclear capacity, and this is a clear signal from government to investors that it sees nuclear as essential to our clean energy transition. This is not only an investment in a greener future, but also in jobs and skills right across the country."

On 26 October, the government introduced the Nuclear Energy (Financing) Bill, which will use the Regulated Asset Base model to fund future nuclear power stations in the UK. The new funding model is expected to attract a wider range of private investment into new nuclear power projects, cutting the cost of financing them and reducing the cost to consumers.

The Sizewell C Consortium - a group of over 200 leading UK nuclear suppliers - also welcomed that announcement. Cameron Gilmour, spokesperson for the consortium, said: "The government has made a welcome and significant step forward in addressing our future energy needs, by outlining a framework for investment for nuclear in the UK. Sizewell C is a project that can start construction in this parliament - delivering jobs and apprenticeships, and much needed certainty for thousands of suppliers up and down the country."

Sizewell C will be a near replica of Hinkley Point C (HPC), which EDF Energy is building in Somerset and, like HPC, it will be able to supply 7% of the UK's electricity once it enters commercial operation. At about GBP18 billion (USD22 billion), EDF Energy has said that Sizewell C will be cheaper to build than HPC, the estimated cost of which is between GBP21.5 billion and GBP22.5 billion.

Under a strategic investment agreement signed in October 2016, China General Nuclear agreed to take a 33.5% stake in the HPC project, as well as jointly develop new nuclear power plants at Sizewell and at Bradwell, which is in Essex. The HPC and Sizewell C plants will be based on France's EPR reactor technology, while the Bradwell plant will feature the HPR1000 (Hualong One) design.