UK invests further GBP1.3bn to keep Sizewell C on schedule

Tuesday, 23 January 2024

The Department for Energy Security and Net Zero said that "committing further government support at this stage will help the project stay on schedule and keep down overall costs". It follows a Development Consent Order issued last week which gave approval for construction to begin and allowed GBP250 million funding for local community and environment initiatives.

The EDF-led plan is for Sizewell C to feature two EPRs producing 3.2 GW of electricity, enough to power the equivalent of around six million homes. It would be a "replica" of the Hinkley Point C plant, under construction in Somerset.

Julia Pyke and Nigel Cann, joint managing directors at Sizewell C, said: "This significant investment underlines the importance of Sizewell C for Britain and is a further sign of confidence in our team to deliver it. With the project now in construction, the funding means we can step up activity in Suffolk and deliver on our commitments to local communities ... it will bring another big boost to British nuclear skills and training, putting the industry in an even better position to deliver the other projects this country needs for its low-carbon future."

Nuclear Minister Andrew Bowie said: "This investment injection means we can steam ahead with work on Sizewell C ahead of the final investment decision targeted later this year. It’s a win for our energy security and sends a strong message to investors that Britain is serious about its low-carbon, homegrown nuclear-powered future."

EDF agreed in October 2016 with China General Nuclear (CGN) to develop the Sizewell C project to the point where a final investment decision could be made. EDF had an 80% stake and CGN a 20% stake. However, the so-called "golden era" of UK-China relations has ended in recent years with the UK government citing security concerns as it reviewed and blocked Chinese investments in UK infrastructure. In November 2022, the UK said it would invest GBP679 million and become a 50% partner with EDF in the Sizewell C nuclear project. A further GBP511 million of funding was made available to the project in summer 2023, with the government funding designed to get the project to the final investment decision.

EDF said in November 2022 that a final investment decision "remained subject to the achievement of certain key stages, in particular the ability to raise the necessary financing to carry out the project as well as the deconsolidation of the project from the Group's balance sheet", adding that it planned to "retain only a minority stake in the final investment decision - a maximum of 20%". At the time it said it aimed to make a final investment decision in 2023.

The UK government, which earlier this month unveiled its roadmap to quadrupling nuclear energy capacity by 2050, has been seeking prospective investors in the Sizewell C project, launching a pre-qualification for potential investors as the first stage of an equity raise process last September. It has also taken legislation through Parliament allowing a new way of funding new large infrastructure projects - a Regulated Asset Base (RAB) funding model, which can see consumers contributing towards the cost of new nuclear power plants during the construction phase. Under the previous Contracts for Difference system developers finance the construction of a nuclear project and only begin receiving revenue when the station starts generating electricity.

The investment was welcomed by the UK nuclear industry with Tom Greatrex, chief executive of the Nuclear Industry Association, saying: "This investment shows the UK is committed to ramping up nuclear capacity to cut gas, cut carbon and provide energy security. The station will generate enough clean power for 6 million homes from a quarter of a square mile of land and create thousands of skilled jobs right across the country ... [and] paves the way for other nuclear projects, both large and small, which will revitalise the industry in the UK."