Sizewell C: Government confirms plan to take £670m stake in nuclear power project

Sizewell C: Government confirms plan to take £670m stake in
nuclear power project
Sizewell C: Government confirms plan to take £670m stake in nuclear power project

Sizewell C project takes major step forward as government unveils plans to establish Great British Energy, a new arms-length public body to oversee UK nuclear power pipeline

The government has approved plans to build the UK's first new nuclear power plant in a quarter of a century, today confirming it has agreed to invest £679m to take a 50 per cent stake in the Sizewell C project being developed in Suffolk by French energy giant EDF.

The "historic" investment will see the UK government become joint shareholder in Sizewell C alongside developer EDF, which will also provide additional investment to match the UK government's stake, muscling out previous shareholder China's CGN in the process.

EDF and the government now plan to work together to attract further third-party investment in the 3.2GW low carbon power project, which once completed would be expected to provide enough power to meet the needs of six million homes for more than 50 years.

It marks the first direct government investment in a major energy project since 1987, when the UK took a major stake in the Sizewell B nuclear power plant at the same site, which became Britain's last large-scale atomic energy facility when it came into operation in 1995.

Sizewell C is expected to create 10,000 skilled jobs, while the government and EDF have agreed that 70 per cent of the supply chain for the project should be delivered by UK-based businesses, according to the Department for Business, Energy and Industrial Strategy (BEIS).

In addition, the government today also announced plans to establish Great British Nuclear, a new arms-length public body to help develop a pipeline of new nuclear projects. More details are expected early in the new year, including on the government's funding commitment to the new body.

Business Secretary Grant Shapps said record high global fossil gas prices exacerbated by Russia's war in Ukraine made it even more important to back "clean, affordable power generated within our borders - British energy for British homes".

"Today's historic deal giving government backing to Sizewell C's development is crucial to this, moving us towards greater energy independence and away from the risks that a reliance on volatile global energy markets for our supply comes with," he said. "This is at the heart of a package of measures that - together with the new Great British Nuclear and powers of the Energy Security Bill - will ensure secure supply for now, and for generations to come."

The announcement confirms plans unveiled in the Autumn Statement earlier this month to give the green light to Sizewell C, which is to be developed using the Regulated Asset Base (RAB) funding model that has previously been used to develop the Thames Tideway Tunnel and the Fifth terminal at London's Heathrow Airport.

Overall, the government estimates developing nuclear through the RAB scheme may lead to savings for consumers of at least £30bn on each project throughout its lifetime, compared to the existing Contracts for Difference system.

CEO of EDF Energy Simone Rossi hailed today's announcement as a "big vote of confidence in Sizewell C", which he said would build on the design underpinning Hinkley Point C, a near identical plant currently being developed by EDF in Somerset.

"It will deliver another big boost to jobs and skills in the nuclear industry and provide huge new opportunities for communities in Suffolk," he said. "New nuclear will protect Britain from volatile global gas markets and help keep bills under control for the country's homes and businesses."

The move forms part of the Energy Security Bill currently making its way through parliament which sets out plans to establish business models for carbon capture and storage projects, low carbon hydrogen project, regulate heat networks and set up a new Future System Operator to govern the grid.

It also follows plans announced yesterday to extend the ECO+ energy efficiency scheme with £1bn of funding and launch an £18m public awareness campaign to encourage consumers to undertake energy saving actions in the home.

Meanwhile, the government looks increasingly likely to bow to internal pressure from its own MPs to loosen planning rules that have effectively blocked new onshore wind developments in England since 2015, and instead allow such developments to go ahead where there is local backing.

However, confirmation of direct investment in the Sizewell C project garnered a mixed response. The Nuclear Industry Association's chief executive Tom Greatrex warmly welcomed backing for the project and described the formation of the new Great British Nuclear body as "a defining moment for UK energy security and for the future of nuclear in Britain".

"Sizewell C will be one of the UK's most important green energy projects ever, cutting fossil fuels, providing clean, affordable power for a very long time, and creating thousands of highly skilled jobs," he said. "This investment, alongside the support for Great British Nuclear and the Energy Security Bill shows the government is serious about building new nuclear capacity alongside renewables and paves the way for the development of a pipeline of new nuclear projects, including small modular reactors, to strengthen energy independence."

But Greenpeace UK policy director Doug Parr questioned the wisdom of proceeding with Sizewell C when the Hinkley Point C project it is based on has seen its budget and timetable repeatedly extended.

"It's hard to work out what drives the government's enthusiasm for new nuclear," he said. "It‘s not cheap, or clean, or necessary as there are better, quicker and less expensive options to deliver electricity. Several academic institutes have shown we can have a 100 per cent renewable system that would be cheaper than those based on nuclear or fossil fuels. And it has the added benefit of not creating millennia of worry over the nuclear waste that future generations will end up dealing with. Why are ministers still obsessing about astronomically expensive, delay-plagued nuclear plants when we have much better options available?"

In related news, French engineering firm Boccard has unveiled plans for its first major UK nuclear power plant components manufacturing facility in Broughton, North Wales.

The facility, which is expected to generate 200 jobs, is aimed at supporting the global supply chain for nuclear power projects, including both large scale power plants as well as the emerging market for small modular reactors and advanced reactor technologies.

"We have decided to locate our new digital state-of-the-art plant in Broughton as it is a growing focal point for the nuclear industries and therefore gives us access to a highly-skilled labour pool on our doorstep," said Bruno Boccard, the firm's chairman and CEO. "Moreover, our investment will support sovereign capability manufacturing in the nuclear industry, helping to position the UK as a leading global force in the sector." 

* This article was originally published here