Go-Ahead for Sizewell C - But Why has Cost Soared to £38bn?
The UK Government has signed the final investment decision for Sizewell C, giving the nuclear power facility the green light.
It is set to support 10,000 jobs once operational and generate 3.2 GW of electricity.
The project’s previous official price was £20bn (US$27bn), but this has now risen to £38bn (US$51.4bn).
Sizewell C’s Joint Managing Director told BBC News that earlier estimates did not account for inflation or risk.
The government will take an initial 44.9% stake and shareholders will include La Caisse, Centrica, Amber Infrastructure and EDF.
UK 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.”
What is Sizewell C?
Sizewell C’s roots go back to 2008 when the government decided new nuclear sites should be constructed, but the project failed to gain much traction until 2020.
EDF Energy first put forward proposals for the site in 2012 and remains a shareholder alongside the government.
Construction of the site began on 15 January 2024 and it is expected to cost a total of up to £30bn (US$40.5bn).
UK Chancellor of the Exchequer Rachel Reeves 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.”
Inside Sizewell C’s funding
The UK Government holds a 44.9% stake in the project, making it the single biggest equity shareholder.
EDF earlier agreed to a 12.5% stake alongside a proposed £5bn (US$6.7bn) debt guarantee from France’s export credit agency Bpifrance Assurance Export to back commercial bank loans.
La Caisse has agreed to a 20% stake, Centrica 15% and Amber Infrastructure 7.6%.
Julia Pyke and Nigel Cann, Joint Managing Directors of Sizewell C, said: “We’re delighted to welcome new investors alongside 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 £4.4bn 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 government says that the Sizewell C investment deal builds on lessons learnt from the construction of Hinkley Point C, where costs rose from £18bn (US$24.3bn) to nearly £50bn (US$67.7bn) between 2015 and 2024.
Sizewell C’s funding model spreads the £38bn (US$51.4bn) cost between consumers, taxpayers and private investors, which the government says will represent a saving of around 20% compared with Hinkley.
The government says it is also providing additional capital to the National Wealth Fund to facilitate lending to Sizewell C.
