Read online https://www.eadt.co.uk/news/business/sizewellc-nuclear-project-government-funding-8648632

Plans to build a new nuclear plant on the Suffolk coast took a significant step forward today with the awarding of £100million in new financial support.

Business and energy secretary Kwasi Kwarteng announced the Government funding for the continued development of the planned Sizewell C twin reactor.

The £20billion nuclear plant – which has yet to get planning approval – would produce 3.2 Gigawatts of electricity, enough to power six million homes.

The funding would aim to continue development of the project and attract further financing from private investors.

Government ministers have made a commitment to reach a final investment decision on funding at least one new nuclear plant in this parliament.

The new plant will aim to provide continuous low carbon electricity, strengthen Britain’s energy security and reduce the country’s exposure to volatile global gas prices.

Talks between the government and the Sizewell C project developer have been continuing since last year.

Mr Kwarteng said: “In light of high global gas prices, we need to ensure Britain’s future energy supply is bolstered by reliable, affordable, low carbon power that is generated in this country

“New nuclear is not only an important part of our plans to ensure greater energy independence, but to create high-quality jobs and drive economic growth.

“The funding announced today will further support the development of Sizewell C during this important phase of negotiations as we seek to maximise investor confidence in this nationally significant project.”

As a result of this new funding package the government will take certain rights over the Sizewell C site and EDF’s shares in the Sizewell C company.

This would allow the opportunity to continue to develop a nuclear option or alternative low carbon energy project on the site.

If the final go ahead for Sizewell C is given, the government will have the £100m reimbursed with a financial return in cash or an equity stake in the project.

EDF Energy CEO Simone Rossi said he was pleased that the Government was showing confidence in Sizewell C which would “lower energy costs for consumers and help to insulate the UK from global gas prices”.

He said: “Together with our own investment, these funds will allow us to continue to move the project towards a financial investment decision.

“Sizewell C will benefit from being a near replica of Hinkley Point C in Somerset which is more than five years into construction and making great progress in the challenging context of the Covid pandemic.

“Sizewell C will provide a huge economic boost to East Suffolk where it already enjoys the support of most local people. It will also bring new opportunities for thousands of nuclear supply chain companies up and down the country.”

The announcement came as the Nuclear Energy (Financing) Bill, which will allow a new funding model for new nuclear projects passes through parliament.

The news was welcomed by Suffolk Coastal MP Therese Coffey, who said: “Nuclear power as a low carbon energy source is a key strand of the government’s plan to achieve net zero by 2050. And whilst there are various matters still to be decided in the planning application – will also be of huge benefit locally – with high quality jobs and economic gain.”

Energy union GMB welcomed the funding. National officer Charlotte Childs welcomed the news as a “massive huge stride towards a low carbon UK.”

She said: “We face an unprecedented energy crisis and we need nuclear projects like Sizewell C to protect consumers, workers and our planet.

“GMB has worked closely with EDF throughout the development of Sizewell and look forward to the more detail discussions needed to shape industrial relations in the future.

“Net zero needs new nuclear and we are proud GMB members will be part of the team that brings low carbon energy to the UK.”

But anti-nuclear campaigners attacked the move. Greenpeace UK’s policy director Dr Doug Parr claimed: “This cash injection is a tacit admission by the Government that nuclear is not commercially viable, but they are so fixated on getting 20th-century nuclear technology delivered they’ll just keep throwing taxpayers’ money at it.

“Including all the other subsidy sources, Sizewell C will now have subsidised development, subsidised construction, subsidised power production and subsidised waste management, for a project by a subsidised company.”

Alison Downes, Stop Sizewell C, said: “It’s extraordinary that the government would give Sizewell C financial backing when the problems at Taishan raise legitimate questions about whether EDF’s EPR reactor works safely.

“Any direct government support seems to compromise the role of the Secretary of State in determining the Sizewell C planning application. We fail to understand why the UK is bailing out crisis-hit EDF, and why the government is so committed to poor value large scale nuclear when there are other, better options.”

 

Read online https://www.ft.com/content/e941d822-2431-43ad-9b4c-911de5341f27

Financing will act like convertible loan and could see taxpayer take a stake in atomic power generation for first time in more than a decade

Jim Pickard and David Sheppard

The British government has moved closer to taking a stake in nuclear power generation for the first time in more than a decade after making an initial £100m investment in the planned Sizewell C power station in Suffolk.

The funding announced on Thursday is part of attempts by ministers to accelerate the project — led by France’s EDF Energy with China’s CGN as a minority partner — which has been plagued by delays as successive governments have struggled to find a funding model that would attract private finance.

The government said the £100m would help bring the Sizewell project to maturity and attract other external investors. It would work like a convertible loan, which would trigger once Sizewell C reaches its final investment decision, expected in three years’ time.

At that point, the government would either take a stake in the project or be repaid. After that, if EDF failed to deliver the scheme the government would take control of the subsidiary set up to build the power station and the site on the Suffolk coast designated for the plant.

Simone Rossi, chief executive of EDF Energy, welcomed the investment, which he said together with the French company’s own funding would “allow us to continue to move the project towards a financial investment decision”.

The British government has not had any involvement in nuclear power generation since it sold its 36 per cent stake in British Energy — which owned eight UK nuclear plants — to EDF in 2009.

The investment comes as ministers continued to grapple with a growing cost of living crisis, including soaring energy bills caused by record gas prices. These pressures have further galvanised efforts to kick-start the development of more low carbon electricity generation.

Boris Johnson, the prime minister, has committed to making nuclear energy a key part in reaching the UK’s climate target of reaching net zero emissions by 2050. Recommended UK energy Rolls-Royce seeks bids for site to make small nuclear power plants.

Despite commitments by successive governments over the past decade to build a new generation of atomic power stations, most of the projects have collapsed as the private sector was unwilling to fund them.

The government first suggested in 2018 that it was prepared to take stakes in new nuclear power stations.

Most of the UK’s existing fleet of ageing reactors, which supply 16 per cent of the country’s power, are being retired this decade, with the last one set to close in 2035.

The government said the £100m in funding was separate from the £1.7bn it allocated to Sizewell C in October to help get the project to a final investment decision. It added the larger allocation was subject to future negotiations with EDF.

In the longer term, the UK plans to use a funding model, known as the regulated asset base model, to pay for the construction of the project. This would add a levy to household energy bills to cover the costs of construction of the plant.

The government hopes that its financial involvement in Sizewell C will help encourage outside investors to provide additional funding as it looks to oust CGN from the project, as part of a wider push against Chinese involvement in key UK infrastructure.

In a statement, the government said no decision had yet been made about the “final configuration” of investors in the project.

Alison Downes, from the Stop Sizewell C protest group, said the statement was notably silent on CGN. “The elephant in the room is still China — this announcement does not mention CGN or appear to do anything to remove them,” she said.