UK government to invest £ 1.7bn in Sizewell C nuclear power plant

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UK taxpayers will face a bill of up to £ 1.7bn to help make the Sizewell C nuclear power plant project a final investment decision over the next three years as the government seeks to revive its efforts to replace the country’s aging reactors.

The funding was included in Wednesday’s budget and follows ministers’ announcements this week of an overhaul of the funding model for new nuclear power plants that will see households pay an upfront tax through their bills to help reduce fuel costs. overall costs.

Prime Minister Boris Johnson has made it clear that nuclear power must play a key role in meeting the UK’s net zero targets. Despite the commitments made by successive governments over the past decade to build a new generation of nuclear power plants, most projects collapsed because the private sector was unwilling to fund them.

Most of Britain’s aging reactors, which provide 16% of the country’s electricity, will be decommissioned this decade, with the last set to shut down in 2035.

EDF, supported by the French state, is currently building Hinkley Point C in Somerset, the UK’s only new nuclear power plant. Other projects, including Wylfa in Wales and Moorside in Cumbria, have been canceled in recent years.

EDF is also piloting the Sizewell C project, which would be built on the Suffolk coast, next to the existing nuclear power plant.

Chancellor Rishi Sunak did not mention Sizewell C in his budget speech on Wednesday. But accompanying Treasury documents indicated there were “active negotiations” with EDF over the plant and that it had allocated “up to £ 1.7bn in direct government funding” to help make a final investment decision before the next election “subject to value for money and approvals”.

State funding represents a substantial proportion of the estimated overall construction cost of £ 20 billion and is expected to lead the government to take a stake in the project, according to people familiar with the discussions.

The government hopes its financial involvement in Sizewell C will encourage outside investors to provide additional funds as it seeks to oust Chinese company CGN from the project, as part of a wider campaign against Chinese involvement in major British infrastructure.

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Ministers hope to attract investors from the UK, US and elsewhere to help fund the nuclear revival before existing reactors retire by 2035, but analysts questioned how much pension and others would be inclined to invest in nuclear given the history of cost overruns in the sector. .

EDF itself is grappling with few ongoing projects outside the United Kingdom and is heavily indebted. Emmanuel Macron, the French president, wants to give the company, which is nearly 84% state-owned, additional financial firepower to invest in both nuclear and renewable energies over the coming decades.

A spokesman for the Sizewell C project declined to comment on the £ 1.7bn funding, but said if the project goes ahead “70% of the value of the construction” will go to companies British and that the project “could be majority owned by British investors”.

Critics have warned that under the new funding model, households could bear the cost of any overruns, which are common in nuclear projects, through their energy bills.


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