Ministers have given further support to EDF Energy’s £20bn Sizewell C nuclear power station in Suffolk with an investment of £100m to help develop the project as the company woos private investors.
The government’s cash injection is designed to “maximize investor confidence” in the project while French state-owned company EDF works to develop a financing plan that satisfies UK investors and ministers.
In return, the State will be entitled to a stake in the capital of the development company behind the project and in the land on which EDF plans to build it. If EDF is able to secure sufficient investor support to make a final investment decision on Sizewell, it would repay the government with a stake in the project or in cash.
The UK government relaunched talks with EDF over the nuclear project at the end of 2020, focusing on whether the company could prove it had learned lessons from its Hinkley Point nuclear project in Somerset , and that a replacement plant would offer the public good value for money.
EDF has since launched a search for investors to help reduce costs for bill payers. It is understood that EDF and the UK government are also hoping to secure enough new investment to replace China’s state-controlled CGN, which has a 20% stake in the critical national infrastructure project.
Sizewell, which is still being planned and developed, would power 6 million homes but has been plagued by opposition from local campaigners, fears over its price and Chinese involvement.
Kwasi Kwarteng, the business and energy secretary, said government funding would add support to the development of Sizewell C “during this important phase of negotiations as we seek to maximize investor confidence in this project. national importance”.
“Given high global gas prices, we need to ensure that Britain’s future energy supply is bolstered by reliable, affordable and low-carbon energy produced in this country,” he said. declared. “New nuclear is not only an important part of our plans to achieve greater energy independence, but also to create high-quality jobs and stimulate economic growth.”
The new support came months after the government introduced legislation to create a new funding model to help the project attract investment at a lower cost than the Hinkley Point C project, which could add between 10 and 15 £ per year to the average energy bill. for 35 years, making it one of the costliest energy projects undertaken.
Tom Greatrex, chief executive of the Nuclear Industry Association, described the funding as “another big step forward for Sizewell C and a big vote of confidence” that “sends a clear signal from the government to investors that it considers projects as Sizewell C as essential”. to our clean energy transition”.
Simone Rossi, chief executive of EDF Energy, said the company was pleased that the government was ‘showing its confidence in Sizewell C’ which would ‘enable us to continue to move the project forward towards a financial investment decision’ .
Rossi claimed Sizewell C, if approved, would reduce energy costs for consumers and help insulate the UK from global gas prices while providing a ‘huge economic boost to east Suffolk’ and “would provide new opportunities for thousands of companies in the nuclear supply chain down the country”.
Alison Downes, from the Suffolk campaign group Stop Sizewell C, said: “We fail to understand why the UK is bailing out EDF in crisis, and why the government is so committed to large-scale, low-value nuclear when there are other better options. ”
EDF’s share price has nearly halved in the past three years to around 8.28 euros per share as technical problems within its global nuclear fleet have sent its costs skyrocketing. It warned investors earlier this month that its French nuclear reactors would produce 10% less electricity than expected this year. Separately, the French government expects the company to take an €8.4bn (£7bn) financial hit to protect households from soaring energy costs by limiting bill increases to 4% this year.