Sizewell C gets ‘green light’ with final investment decision

The UK Government has today (22 July) agreed a landmark, multi-billion-pound deal to build Sizewell C — a major step forward in the delivery of a new ‘golden age’ of nuclear power.

The Energy Secretary has today (22 July) signed the final investment decision for Sizewell C, which will deliver clean power for the equivalent of six million homes and support 10,000 jobs once operational. The deal represents the country’s most significant public investment in clean, homegrown energy this century — in a major boost for energy security, jobs and economic growth. The deal ends an era of dithering and delay to give Sizewell C the go-ahead, that will help secure Britain’s home-grown nuclear supply far beyond 2030. It marks a major step in the Government’s clean energy superpower mission, which is about replacing the UK’s dependence on fossil fuel markets with clean homegrown power that the country controls.

The plant will be operational for at least six decades. Analysis shows the project could create savings of £2 billion a year across the future low-carbon electricity system once operational — leading to cheaper power for consumers. The project will also help to kick-start economic growth and get Britain building. At peak construction, Sizewell C will support 10,000 jobs directly employed in the project, and thousands more in the nationwide supply chain, as well as creating 1,500 apprenticeships. 70% of the value of construction is set to be awarded to British businesses — Sizewell C Ltd anticipates it will have 3,500 UK companies in its supply chain across the entire country.

Energy Secretary Ed Miliband said: “It is time to do big things and build big projects in this country again — and today we announce an investment that will provide clean, homegrown power to millions of homes for generations to come. This Government is making the investment needed to deliver a new golden age of nuclear, so we can end delays and free us from the ravages of the global fossil fuel markets to bring bills down for good.”

The Government has confirmed it will take an initial 44.9% stake to become the single biggest equity shareholder in the project — meaning the British people will benefit from the Government’s investment. The new Sizewell C shareholders include La Caisse with 20%, Centrica with 15%, and Amber Infrastructure with an initial 7.6%.

This comes alongside French energy giant EDF taking a 12.5% take in the project, set out earlier this month, as well as a proposed £5 billion debt guarantee from France’s export credit agency, Bpifrance Assurance Export, to back the company’s commercial bank loans.

First investment in nuclear energy
Alongside this investment, the National Wealth Fund — the Government’s principal investor and policy bank — is making its first investment in nuclear energy. It will provide the majority of the project’s debt finance, working alongside Bpifrance Assurance Export, to help support the building of the power plant.

Rachel Reeves, the Chancellor of the Exchequer, said: “La Caisse, Centrica and Amber’s multi-billion-pound investment is a powerful endorsement of the UK as the best place to do business and as a global hub for nuclear energy. Delivering next-generation, publicly-owned clean power is vital to our energy security and growth, which is why we backed Sizewell C. This investment will create thousands of good quality jobs and boost the local economy as we deliver on our Plan for Change.“

Julia Pyke and Nigel Cann, joint managing directors of Sizewell C, said: “We are delighted to welcome new investors alongside the Government and EDF who, like our suppliers, have strong incentives to keep costs under control and ensure we deliver Sizewell C successfully for consumers and taxpayers.

“By investing in Sizewell C, they are laying the foundations for a more secure, cleaner and more affordable energy system. Because 70% of our construction spend will be in the UK, with a £4.4 billion commitment to the east of England, they will also help to create thousands of great jobs and new opportunities for people and businesses up and down the country. We are determined to deliver this major infrastructure differently, and to make sure this is a project Britain can be proud of.”

The investment deal builds on lessons learnt from the construction of Hinkley Point C to provide a funding model that spreads the around £38 billion cost of constructing Sizewell C between consumers, taxpayers and private investors. This represents a saving of around 20% compared with Hinkley Point C and demonstrates the value of building a virtual replica project.

For the first time, the British public will be co-owners of a nuclear power plant alongside experienced private sector partners — with consumers to benefit from the Government’s investment. This will ensure the impact on consumer bills is limited to an average of around £1 per month over the duration of Sizewell C’s construction, with the nuclear plant to deliver cheaper clean power for decades to come once operational.

Despite the UK’s strong nuclear legacy, including opening the world’s first commercial nuclear power station in the 1950s, no new nuclear plant has opened in the UK since 1995, with all of the existing fleet except Sizewell B likely to be phased out by the early 2030s. Sizewell C was one of eight sites identified in 2009 by then-Energy Secretary Ed Miliband as a potential site for new nuclear. However, the project was not fully funded in the 14 years that followed under subsequent governments.  

The most ambitious nuclear programme for a generation
The Government’s nuclear programme is now the most ambitious for a generation. Once small modular reactors and Sizewell C come online in the 2030s, combined with Hinkley Point C, this will deliver more new nuclear to the grid than over the previous half century combined.

Recently, the Government also set out next steps for small modular reactors in the UK and last month selected Rolls-Royce SMR as the preferred bidder to build first reactors of this kind in the country. Following this, the Prime Minister signed a new agreement with Czech Prime Minister Fiala last week that will see the two countries work more closely on small modular reactors to seize export opportunities and support high-skilled jobs.

Simone Rossi, CEO of EDF in the UK said: “EDF welcomes the Government’s announcement that it has delivered on its commitment to take a final investment decision on the Sizewell C project. Alongside Hinkley Point C, the project will help drive economic growth, strengthen energy security and lower bills over the long term.

“The confirmation of the private investment is very positive and reflects the growing attraction of the role of nuclear power in the energy transition. It could also pave the way for the financing of future large nuclear projects in the UK.”