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Legal & General has ruled out helping to fund the new Sizewell C nuclear power plant, dealing a blow to EDF as it seeks backers for the £20bn project.
EDF is in negotiations with the government about taxpayer support for the planned plant in Suffolk but will also need institutional investors, which it argues can make stable returns over the decades of a reactor’s life.
L&G has not spoken publicly about its plans but in a written response to a pension-holder, one of its investment service consultants said: “I have had it confirmed that Legal & General will not be investing in the Sizewell C nuclear power plant.” L&G declined to comment further.
It comes after Aviva Investors expressed concerns about the potential ESG (environmental, social and governance) risks of nuclear power. It said the ESG impact of nuclear was “far from clear at this time.”
The government is relying on nuclear power to help reach its legally binding target of cutting carbon emissions to net zero by 2050, but investors also need to get comfortable with radioactive waste management, water usage, and the remote but catastrophic risks of a nuclear accident.
L&G, which has more than £1trn assets under management, has invested more than £1.3bn towards low-carbon energy sources such as solar panels and ground source heat pumps.
EDF’s discussions over financing for Sizewell C come at a critical time for the UK’s nuclear sector. Most of the UK’s ageing reactors are set to come offline by 2030, but the only replacement plant currently being built is Hinkley Point C in Somerset, by EDF and its Chinese partner CGN.
Critics argue large scale nuclear power plant have had their day given the growing competitiveness of wind and solar plants, and emerging technologies such as small-modular nuclear reactors. L&G’s boss Nigel Wilson reportedly described Hinkley in 2016 as a “£25bn waste of money”.
But backers insist large plants are a much-needed source of reliable, low-carbon energy. Sizewell C has previously stressed the plant will “vast amounts of very low-carbon energy” with a small footprint compared to other sources of sustainable energy. It adds nuclear is “one of the safest forms” of producing electricity, and the project will bring thousands of jobs and significant investment into Suffolk.
Stop Sizewell C, which is campaigning against the proposed plant in Suffolk, said: “Nuclear giga-watt projects are categorically not green […] They are expensive and slow to build, with overruns almost guaranteed… Compared to responsibly delivered renewable energy there is no contest.”
Read more: Sizewell C – the £20bn nuclear question
One of Britain’s biggest investors has cast doubt over whether it would back new nuclear power stations due to environmental concerns.
Aviva Investors said nuclear’s ESG (environmental, social and corporate governance) impact was “far from clear at this time”, even as the Government backs the technology to help cut carbon emissions.
Its comments highlight the challenge facing French state power giant EDF as it seeks finance for the planned £20bn Sizewell C reactor in Suffolk. EDF is in talks with the Government over public backing, but will also need to attract institutional investors.
Nuclear power does not generate carbon dioxide but investors also need to be comfortable with the management of nuclear waste, water usage, and the remote but catastrophic risk of a nuclear accident.
In response to queries from investors, Aviva Investors said: “As you are probably aware, the UK Government is looking at expanding nuclear capacity as part of its efforts to achieve net-zero emissions by 2050.
“We consider the potential ESG impact in all of our investment decisions. However, the ESG impact of nuclear is far from clear at this time and we are not actively involved in any such investments.”
A spokesman for Sizewell C said there was a “compelling ESG case for nuclear” given its vast production of low-carbon energy.
He added: “It is one of the safest forms of producing electricity, with a good track record in managing radioactive waste. The social benefits of Sizewell C include thousands of jobs, 1,500 apprenticeships and huge investment in the regional economy.”
The campaign group Stop Sizewell C said Aviva was “right to be concerned”. The Sizewell C site is particularly sensitive as it is within an Area of Outstanding Natural Beauty, next to the Minsmere nature reserve, and takes in part of the Sizewell Marshes, designated a site of special scientific interest.
A Stop Sizewell C spokesman added the social benefits would be “severely undermined locally” by EDF’s plans to bring to Sizewell workers currently building EDF’s Hinkley Point C plant in Somerset.
15 February 2021. An independent report by Development Economics  shows that five out of the government’s seven remaining potential sites for new nuclear power projects would be likely to benefit more in “levelling up” terms than East Suffolk, where EDF is proposing to build Sizewell C.
The New Nuclear Location Benchmarking report – which was updated in February 2021 – was commissioned by Stop Sizewell C in order to better understand EDF’s claim that the construction of Sizewell C is key to Suffolk’s economic recovery. The ability of a large infrastructure project to contribute positively to the area that hosts it depends on a number of variables, such as:
In 2020, Development Economics independently selected 12 indicators of socio-economic performance, including demographic characteristics and change, availability of jobs, labour market activity, workforce characteristics, structure of the employment base, earnings, annual contributions to wealth generation and levels of new business formation, and assessed data for eight local authorities. Updating the report in January 2021, aggregating the results produced a ranking in which the Moorside site  demonstrated the greatest potential for ‘levelling up”, followed by Hartlepool, Wylfa, Heysham and Bradwell with only Oldbury in Gloucestershire below Sizewell. Hinkley Point, which is already under development, was in 7th place.
Alison Downes of Stop Sizewell C said: “Whilst we have fundamental and legitimate questions about whether Sizewell C is in fact needed, we wanted to see how East Suffolk compares with other sites in terms of addressing the government’s “levelling up” agenda, and the answer is clear: East Suffolk is just off the bottom of the list of available sites. If government is determined to pursue further nuclear mega-projects, it should abandon the current developer-led approach – which is totally unstrategic and has left us with the only active projects being by overseas state-backed developers  using expensive, unproven technology  on environmentally unsuitable  sites – in favour of a pro-active levelling up approach.”
“We contend that the economic benefits for Suffolk will be limited by EDF’s intended use of the Hinkley supply chain, Suffolk’s low unemployment and lower level of appropriate skills. EDF’s expectation that almost 6,000 Sizewell C workers will require local accommodation and still more are assumed to travel 90 minutes each way  proves that local people won’t take the majority of jobs available, and certainly not the higher-skilled roles. Indeed, according to EDF’s Sizewell C application documents, only 7-8% of jobs in the Professional and Management sector  would go to people within the 90-minute commuter zone. Meanwhile, displacement of workers from existing businesses, traffic congestion and the huge scale of the construction will damage Suffolk’s resilient SME-based local economy, especially in tourism at a time when there is huge potential for that to grow.”
The full report is online here
In 2010 eight locations were selected by the UK Government as being potentially suitable for the development of new nuclear power stations. The purpose of this paper is to assess each of the shortlisted locations and identify the ones where a decision to build and operate a new power station has the greatest potential to make a contribution towards ‘levelling up’ local areas that are relatively disadvantaged in terms of economic and labour market performance.
The approach taken involves the use of 12 indicators of socio-economic performance using regularly updated data available at a local authority level from the Office for National Statistics. The indicators cover aspects such as demographic characteristics and change, availability of jobs, labour market activity, workforce characteristics, structure of the employment base, earnings, annual contributions to wealth generation and levels of new business formation.
The specific criteria chosen are as follows:
|· Proportion of the population of working age||· Average annual rate of job growth since 2001|
|· Trend in working age population since||· Business start-up rate per capita|
|· Employment rate||· Proportion of employment in Construction|
|· Spare capacity in local labour force||· Proportion of employment in the Hospitality sector|
|·Proportion of workforce in relevant occupations||· Full time earnings of residents|
|· Job density||· Gross Value Added per capita|
The reasons these criteria were chosen includes the following:
An overall assessment of rankings by location can be obtained by aggregating the ranking for each individual indicator and generating an overall average score across all indicators.
An update in January 2021 used more recent data for nearly all the same set of indicators as listed above where new data was available. The only datasets that had not yet been updated were those pertaining to Job density and average annual rate of total job growth (i.e., two indicators of the original set of 12).
However, for one indicator a change had to be made. The ONS is no longer updating the GVA per capita data series for individual local authorities. Instead, a similar ONS dataset was used i.e., the average value of GVA per filled job located in each local authority area. This indicator also has the advantage of better reflecting the average productivity of the deployed workforce in each local authority area, plus it also has the advantage of being available for a more recent year (2018).
Overall rankings: 2021 analysis
|Site||Local authority area||Average score||Ranking|
|Hinkley Point*||Somerset W & Taunton||5.42||7|
(*Hinkley Point is under development)
The conclusion of the updated assessment is that the location that would benefit most from an investment decision is Moorside in Copeland (Cumbria), followed by Hartlepool and Wylfa on Anglesey.
On the other hand, East Suffolk occupies the third lowest of the ranking positions with only Somerset West & Taunton (a site already under developments) and South Gloucestershire possessing a lower aggregate score.
This revised assessment reflects the most up-to-date data available as of January 2021. The intention is to update this assessment on an annual basis using the most recent data available.
The Spectator, 19 December 2020
I love Suffolk. This Christmas I will be there with my family and we’ll almost certainly walk up the coast, joining dog-walkers, bird-watchers, hikers and even swimmers in one of the most beautiful and unspoiled parts of the UK. The secret of Suffolk is its relative inaccessibility. No major motorway connects it and once you arrive you’re committed to a sprawling network of country lanes that twist through heathland and grazing marsh, mudflats and reedbeds. Minsmere, a nature reserve that’s home to 6,000 wildlife species, is among its glories. The nightjar, the woodlark, the Dartford warbler and the silver-studded butterfly are just some of the rare species found there.
At least for the time being.
Not just the heritage coast, but quite possibly the entire county, could be changed for ever by the arrival of two new European pressurised reactors (EPRs). ‘Sizewell C, a proposed new nuclear power station in Suffolk, has the potential to generate the reliable low carbon electricity the country needs for decades to come’ is the claim made by EDF Energy, the French-owned company behind the project. It also has the potential to be a disastrous and expensive mistake. Many believe it already is.
First there’s the site, which, if this were an episode of Yes Minister, might have been chosen for its comedy potential. Next to a world-famous bird sanctuary? In an area well-known for serious coastal erosion? As the avocets and warblers take flight, the entire thing could be reclaimed by a vengeful sea. The site is too small. It’s poorly connected. (EDF put forward the idea of an 800m jetty to allow access by water. The idea sank.) Imagine 1,000 HGVs arriving every day, 10,000 cars, hundreds of buses. Actually, if you know the area, you can’t.
As for EDF, perhaps you should judge a company by the company it keeps. EDF is in bed with CGN or China General Nuclear — blacklisted by the US government after the FBI and Department of Justice uncovered a nasty propensity for stealing American technology for its own use.
EDF may have lots of things going for it, but money isn’t one of them. Already stretched to the limit by its 66 per cent stake in Hinkley Point (with a budget that has risen from £16 billion to at least £ 21.5 billion, making it the most expensive power station in the world), it needs £20 billion and hopes the UK government will come up with most of that through either a large stakeholding or a tax added to energy bills known as Regulated Asset Base.
To be fair, EPR nuclear reactors are notoriously difficult and expensive to construct. Look at Olkiluoto Island to the west of Finland, which went wrong almost at once when the slab base was incorrectly laid, a design fault which could have caused the entire thing to collapse if anyone sneezed. The project has been swamped by lawsuits. Or Flamanville in France, where costs have risen from €3.3 billion to €12.4billion and the EPR is already eight years late. The French energy minister has described it as a ‘mess’.
Here are two simple truths.
Right now the main beneficiary of the nuclear industry is… the nuclear industry. No western European country has commissioned new builds apart from the fiascos in Finland and France. Why is EDF even suggesting an EPR when there are other options that could be considered? There are the small modular reactors, for example, proposed by Rolls-Royce and put together in factories off-site, each one producing 440 megawatts of electricity, enough to power a small city. But that’s not what EDF does. It’ll stick with what it knows, even if what it knows is cumbersome and expensive.
And slow. Sizewell C needs planning consent and operating licences that won’t be in place before 2022. It will take 12 years to construct. The earliest it could power even a single Christmas tree light is 2034, and it will need another six years to offset the CO2 created by its construction. Net zero is of course the ultimate goal. But there are other ways to achieve this. Suffolk has offshore wind farms with more planned. Hydropower, geothermal energy, hydrogen cell technology — there’s every chance that by the time Sizewell C opens it will already be outdated.
But will it actually go ahead? Nobody knows. The Prime Minister has approved the start of negotiations with EDF and he does like his ‘big’ projects, but in this case that’s exactly the problem. As Alison Downes, a human rights campaigner now leading the Stop Sizewell C protest group, told me: ‘We have no ideological opposition to nuclear power. It’s the sheer scale and intensity of what’s required to build these huge reactors — the workforce and the materials and all the rest of it — that have angered local people.’ A petition against the project has been signed by 19,000 of them.
They may well know what to expect. Look at Leiston, just a few miles away, which bought into the myth of Sizewell B. Huge social problems involving pop-up brothels and drug dealing arose during its construction (1987-95) and what has been left behind is hardly glorious. The town looks tired and a little sad. Anthony Douglas CBE, chair of the Suffolk Safeguarding Partnership which protects children and adults at risk in the county, describes ‘a significantly deprived population… with little social mobility’. This is the legacy of Sizewell B, and he worries that years of disruption during the new construction will further impact the health and wellbeing of local people.
Call me a Nimby if you must. How cleverly Donated (the Department Of Nasty Acronyms To Eliminate Debate) attacks our quality of life with easy insults. Not in my backyard — yes, but how else are we to protect the world if we don’t look out for our backyards, for our neighbours, for each other? By the time Sizewell C is actually producing electricity I could well be dead, so in fact it’s your and my children’s backyards that concern me.
And on that cheery note, COTS! Work it out.
Proposals to build a new nuclear power station on the Suffolk coast at Sizewell have taken a significant step forward as the government confirmed it is seeking to invest in the project.
It has said it will start talks with EDF Energy over investing in the power station – although a final decision on whether it can go ahead is still some way away, and subject to planning approval.
The government statement said the negotiations were part of its “options to enable investment in at least one nuclear power station by the end of this Parliament”
The energy giant is currently applying for planning permission for the 3.2-gigawatt plant, which could create thousands of new jobs during construction and operation if given the go-ahead.
However the proposal has prompted widespread local concern because of proposals to use large areas of environmentally-sensitive land which is part of the eco-system with the Minsmere Nature Reserve at its heart.
The government has also warned that it will have to be convinced about the economic benefits of the project.
In a statement, which also set out its Energy White Paper, the Government said: “This is the next step in considering the Sizewell C project, and negotiations will be subject to reaching a value-for-money deal and all other relevant approvals, before any final decision is taken on whether to proceed.
“The successful conclusion of these negotiations will be subject to thorough scrutiny and needs to satisfy the Government’s robust legal, regulatory and national security requirements.”
Humphrey Cadoux-Hudson, EDF Energy’s Managing Director, Nuclear Development: “The Government’s decision to enter negotiations on Sizewell C is great news and further recognition of the vital role large scale nuclear will play in getting to net zero.
“The go-ahead for Sizewell C would bring the Green Industrial Revolution to life, creating thousands of British jobs and apprenticeships, and delivering a huge boost for thousands of nuclear supply chain companies up and down the country. It will be a project Britain can be proud of.
“We are eager to start discussions with the Government on a suitable financing model for the project and we look forward to the next phase of scrutiny of our plans by the Planning Inspectorate.
“Sizewell C will build on the great progress being made at Hinkley Point C and, as a copy, will benefit from lower construction and financing costs. We are confident that we can arrive at a funding solution which will provide value for money and help to lower energy bills for consumers.”
The proposals have already sparked widespread concern among local politicians with MPs Dr Therese Coffey and Dr Dan Poulter and both Suffolk County Council and East Suffolk Council saying they have major worries about the plans for the station – even though they are not opposed in principal to the aims of the project.
Alison Downes from the Stop Sizewell C Campaign did not feel today’s announcement was particularly significant: “We have known the government is in talks about this, but this does not take things forward.
“They are talking about whether they should take a small stake in the project – but there is still a very long way to go before any final permission is given. From that point of view I don’t think this changes things at all.”
But Terry Baxter, chief executive of Inspire Suffolk and a keen backer of the project, felt it was very significant: “This is the largest infrastructure project proposed for East Anglia and the government wants to show its support by investing in it.
“That will be very good for jobs in the area – giving real hope to people and families who need good, well-paid, work right here in Suffolk.”
The government has today confirmed that it has entered talks with EDF over funding options for the Sizewell C nuclear power station in Suffolk.
The announcement, which came as ministers unveiled the long-awaited energy white paper, could see the government take a financial stake in the project.
It comes after months of uncertainty regarding the future of the UK’s nuclear stations, which many consider to be central to Boris Johnson’s climate change commitments.
Twin-reactor plant Sizewell C is a clone of Hinkley Point C in Somerset, and could provide up to seven per cent of the country’s electricity.
At the moment, the project, which is slated to cost around £20bn, is part-funded by Chinese state-owned firm CGN.
However, in recent weeks there have been reports that the company is looking to pull out of the plant amid a worsening of relations between London and Beijing.
Until this morning, doing so would have called the future of the project into question, a potentially grave blow for the nuclear industry in this country.
Tom Greatrex, Chief Executive of the Nuclear Industry Association, said: “The Government’s decision to enter advanced negotiations with EDF on Sizewell C is very good news for our environment and our economy.
“Sizewell is a vital next step towards the net zero power mix we need for the future. As well as at least 60 years of constantly available clean electricity, this project will provide thousands of highly skilled, well paid and long term jobs across the supply chain, at a time when they are badly needed.”
Unions GMB and Unite both welcomed the talks, saying that the project could create 25,000 jobs – and 1,500 apprenticeships – during the construction phase.
But representatives for the Stop Sizewell C campaign pointed out that the talks were no guarantee the project would go ahead.
“As Alok Sharma said, this is not a green light to build Sizewell C and the idea that it could provide value for money is pie in the sky”, said campaigner Alison Downes.
“Costing at least £20bn, Sizewell C remains too slow and expensive to help our climate emergency, and both the government and any pension funds considering the project must beware the reputational risk of investing in a still unproven reactor design that even the French are abandoning.”
At the moment, the UK has eight working power plants, providing around 20 per cent of the country’s power, but four of these are due to shut by 2024.
In recent years, a number of newbuild projects championed by former Tory governments have stalled, including Wylfa in north Wales, which Japanese firm Hitachi pulled out of in the summer.
With officials still consulting on a new funding model – the Regulated Asset Base – which would see consumers pay for the project through higher bills – the sector seemed to have reached a standstill.
But last week the government’s climate advisers said that the country would need to develop eight gigawatts of new nuclear power by 2035 in order to hit its climate targets.
Alongside the nuclear commitment, the white paper will also lay out a number of extra pledges, which it said would support 220,000 jobs around the country over the next decade.
These include a plan to save consumers money through a system which automatically switches them to a lower energy tariff.
In addition, it confirms that the UK will set up its own Emissions Trading Scheme (ETS) from 1 January to replace the EU ETS, ruling out the prospect of a carbon tax.
The replacement scheme will be more ambitious than the original, with the cap on emissions allowed within the system will be reduced by 5 per cent from day one.
The government also extended its commitments to developing carbon capture and storage (CCS) technologies, including plans to bring one such project online by 2030.
It is hoped that the development technology, alongside other low-emissions energy sources such as hydrogen power, can support the North Sea oil and gas industry through the transition away from fossil fuels.
The paper also revealed that a North Sea Transition deal laying out these plans would be signed in the first half of 2021.
Energy executives welcomed the new commitments, with SSE chief executive Alastair Philips-Davies commenting:
“Cost efficient renewables coupled with cutting edge carbon capture and storage technology and a robust and stable carbon price is the pathway to net zero and we welcome the Government’s focus on all three.
Today’s commitments follow shortly after Johnson’s 10 point climate change plan, which was released last month, and included a pledge to ban the sale of all new petrol and diesel cars by 2030.
Business secretary Alok Sharma said: “Today’s plan establishes a decisive and permanent shift away from our dependence on fossil fuels, towards cleaner energy sources that will put our country at the forefront of the global green industrial revolution.
“Through a major programme of investment and reform, we are determined to both decarbonise our economy in the most cost-effective way, while creating new sunrise industries and revitalising our industrial heartlands that will support new green jobs for generations to come.”
The Government has opened talks with energy firm EDF on the construction of the £20billion Sizewell C nuclear power station, which could generate enough electricity for around 7 per cent of the UK’s power demand.
The site in Suffolk would be a near replica of Hinkley Point C in Somerset, which is Britain’s first new nuclear plant in more than two decades and is already being built by the French energy firm with backing from China’s CGN.
The Government said it would enter into negotiations with EDF – but any deal must be affordable and provide value for money, with the project having already proven controversial with protesters slamming its huge cost.
The Stop Sizewell C campaign group which was formed seven years ago has warned the site will divert investment from other green energy sources such as renewables and would damage tourism and nature in the area.
But EDF claim it will generate enough ‘always-on’ low-carbon electricity to power six million homes and create 25,000 jobs. The energy firm is currently applying for planning permission for the 3.2-gigawatt plant.
The government has opened talks with EDF over the construction of the £20 billion Sizewell C (lighter grey on the right, next to Sizewell B) nuclear plant in Suffolk.
The site in Suffolk would be a near replica of Hinkley Point C in Somerset, pictured being constructed in September
Caroline Lucas, Green Party MP for Brighton Pavilion, told BBC News: ‘When renewables costs are plummeting, it’s madness to waste £20billion on another nuclear white elephant. It will leave consumers with higher bills, destroy important habitats and unlikely to be online till the late 2030s.’
In a statement, the Government said the discussions with EDF are part of its ‘options to enable investment in at least one nuclear power station by the end of this Parliament’.
It came as the Government put forward its Energy White Paper, which outlines plans for a clean energy system it said will support 220,000 jobs in the next 10 years.
Business and Energy Secretary Alok Sharma said: ‘Today’s plan establishes a decisive and permanent shift away from our dependence on fossil fuels, towards cleaner energy sources that will put our country at the forefront of the global green industrial revolution.
‘Through a major programme of investment and reform, we are determined to both decarbonise our economy in the most cost-effective way, while creating new sunrise industries and revitalising our industrial heartlands that will support new green jobs for generations to come.
‘At every step of the way, we will place affordability and fairness at the heart of our reforms – unleashing a wave of competition so consumers get the best deals possible on their bills, while protecting the vulnerable and fuel-poor with additional financial support.’
But he stressed that EDF has not yet been given a ‘green light’ for construction. ‘We are starting negotiations with EDF, which would be the developer at Sizewell C,’ Mr Sharma told BBC Radio 4.
‘What this is not is a green light on the construction, so what we will be doing is looking to see whether we can reach an investment decision in this parliament on that particular project.
‘We will only do so if this delivers value for money for taxpayers and consumers.’
Alison Downes from the Stop Sizewell C group said today: ‘As Alok Sharma said, this is not a green light to build Sizewell C and the idea that it could provide value for money is ‘pie in the sky’.
‘Costing at least £20billion, Sizewell C remains too slow and expensive to help our climate emergency, and both the government and any pension funds considering the project must beware the reputational risk of investing in a still unproven reactor design that even the French are abandoning, to be constructed on an eroding coastline, neighbouring the world famous Minsmere reserve.’
But Simone Rossi, EDF’s UK chief executive, said: ‘We’re right behind net zero and, by investing in renewables and nuclear at Hinkley Point C and Sizewell C, we’re supporting decarbonisation while creating jobs across the UK.
‘We will continue to help our customers find affordable, low-carbon ways to travel and heat their homes and businesses. The time for action is now and we look forward to working with the Government to implement its energy and climate policies, including the financing of new nuclear.’
Business Secretary Alok Sharma meets Imperial College staff at a carbon capture lab in an undated photo released today
Sizewell B is a nuclear power station located on the Suffolk coast, which is Britain’s only pressurised water reactor
Emma Pinchbeck, chief executive at Energy UK, said: ‘Today’s White Paper reveals the scale and opportunity of the energy transition, with aims in it to at least double the amount of clean electricity produced today, start making our homes warmer and greener, and help the switch to electric vehicles.
‘The energy industry will do our bit to innovate, supporting our customers so that they benefit from the net zero transition and investing in the green infrastructure we need – but clear policies from government help us do that.
‘This is what the White Paper – and other publications over the next year – should provide.’
The White Paper will outline moves to deliver the pledge to develop 40 gigawatts of offshore wind, including floating wind turbines, and invest £1 billion in technology to capture and store carbon emissions underground.
There will also be details on investing £1.3billion to accelerate the rollout of electric vehicle charging points in homes, streets and motorways, and measures to improve the energy efficiency of homes and move away from fossil fuel boilers.
Consumers will be offered a simple method of switching to a cheaper energy tariff, and testing automatically switching customers to fairer deals to tackle ‘loyalty penalties’, the Government said.
The White Paper will also include measures on establishing a new UK emissions trading scheme, which the Government said will be more ambitious than the current EU scheme it replaces.
In a statement, which also set out its Energy White Paper, the Government said: ‘This is the next step in considering the Sizewell C project, and negotiations will be subject to reaching a value-for-money deal and all other relevant approvals, before any final decision is taken on whether to proceed.
‘The successful conclusion of these negotiations will be subject to thorough scrutiny and needs to satisfy the Government’s robust legal, regulatory and national security requirements.’
The White Paper set out plans to transition to net zero emissions by 2050.
Sizewell C will provide 900 skilled jobs over its operating lifetime and support UK energy resilience by meeting seven percent of its demand for electricity, thus reducing the need for imports, EDF said.
Today’s update comes after it was revealed that China was considering pulling out of the Sizewell C nuclear plant.
The country’s nuclear agency, China General Nuclear Power (CGN), is planning to duck out of the next phase of the £20billion project, claim industry sources.
The change in power supply since 1998 is shown in a graphic, released as part of the Government’s Energy White Paper today
Analysis shows electricity demand could double by 2050, with power displacing petrol/diesel in cars and gas for heating. The difference in demand scenarios is driven mostly by how much electricity replaces gas for heating or petrol/diesel in cars
CGN holds a 20 per cent stake in the Suffolk plant and has spent years developing it with EDF.
The agency has not revealed how much it has invested in the Sizewell C development phase, though it is estimated to be hundreds of millions.
Its departure at the construction stage could leave a huge hole in the project’s funding – and could deal another body blow to the Government’s energy strategy.
The reports come as tensions between London and Beijing have flared since the Government’s decision to exclude Huawei’s equipment being used in new 5G networks.
The recent clampdown on foreign investment and takeover rules have also added to the hostility.
An industry source said: ‘If the UK were to lose Chinese know-how in nuclear it would be a shame given their expertise in building and operating the reactors that would be used at Sizewell C.’
Economy-wide analysis has suggested deep ‘decarbonisation’ in most sectors, such as through electrification. The final 5 per cent are based on the hardest to decarbonise elements of aviation, agricultural, industry and buildings
This graphic, also in the Government’s Energy White Paper, shows the electricity mix today and illustrative mixes for 2050
EDF submitted proposals for Sizewell C in 2012 and CGN signed on as a partner in 2016.
The pair are also working together on Hinkley Point C and on plans for another plant in Bradwell, Essex.
They had been hoping to start building Sizewell C in early 2022. It is estimated the plant could create 25,000 jobs and the Sizewell C consortium, a group of businesses and unions, have said it is crucial for supporting the nuclear industry’s supply chain and preserving skills learnt at Hinkley Point C.
The Government is under pressure to unveil a detailed strategy for the nuclear industry as a number of plants come offline in the early 2020s amid fears the UK could suffer blackouts by the early 2030s.
Ambitious plans have so far fallen flat and of six sites earmarked for new sites to replace the ageing nuclear fleet more than a decade ago only one, Hinkley Point C, is being built.
The latest of a string of setbacks came in September, when Japanese group Hitachi pulled out of the Wylfa project on Anglesey in North Wales.
Britain, which will host the UN’s next major climate summit COP26 in the Scottish city of Glasgow next year, announced the EDF talks in its Energy White Paper.
The government has begun talks with EDF about the construction of a new £20bn nuclear power plant in Suffolk.
The Sizewell C site could generate 3.2 gigawatts of electricity, enough to provide 7% of the UK’s energy needs.
But it has proved controversial with campaigners saying it is “ridiculously expensive” and that taxpayers will have to foot the bill for extra costs.
The government said any deal would be subject to approval on areas such as value for money and affordability.
EDF, the French energy giant, is also building the Hinkley Point C nuclear energy plant in Somerset in partnership with China General Nuclear Power.
The government said talks with EDF about Sizewell C would depend on the progress of the Hinkley Point C. However, that project is set to cost up to £2.9bn more than originally thought and will be up to 15 months late.
China General Nuclear Power has a 20% stake in Sizewell C but is thought to be planning to pull out after security concerns were raised about a Chinese state-owned company designing and running its own design nuclear reactor on UK soil.
If it does pull out, it would increase the need for new investors. One option could be for the government to take a stake in the plant.
Monday’s announcement is part of the long-awaited Energy White Paper, which ministers say will support up to 220,000 jobs over the next decade.
The paper sets out specific steps to cut emissions from industry, transport and buildings.
The policies should remove 230 million metric tonnes of emissions, which is equivalent to taking 7.5 million petrol cars off the road, the government says.
The paper outlines a policy to boost competition in the energy retail market to tackle the “loyalty penalty” in which long-standing customers pay more than new ones.
It will also provide at least £6.7bn in support to the fuel poor and most vulnerable over the next six years.Government in talks to fund £20bn nuclear plant
The government has always been clear that it remains committed to new nuclear power to meet its target of net zero emissions by 2050.
With other nuclear projects suffering recent setbacks, and an identical plant already under construction in Somerset, Sizewell was the clear front runner to get approval.
The high cost of big nuclear plants and the plummeting cost of renewables like offshore wind make a £20bn project like this controversial, but the enormous quantities of low carbon non-intermittent electricity it produces is considered by the government to be an essential part of the UK’s future energy mix as existing nuclear plants are phased out.
Any final decision to build the plant will be subject to a full regulatory and planning approval process. Some local opposition groups claim the project will damage the surrounding environment and important wildlife habitats, but there is also local support for the number of high quality jobs it will bring to an area which includes areas of high unemployment.
Commenting on the talks with EDF, the government said they would hinge on how Hinkley Point C is progressing, “and the developer’s application of lessons learnt from Hinkley Point C across to Sizewell C from development and design, through construction and commissioning, and into operations”.
Hinkley Point is now estimated to cost between £21.5bn and £22.5bn, with EDF blaming “challenging ground conditions”.
If the Sizewell C plant proceeds, it could create thousands of new jobs during construction and operation, the government said.
“We are starting negotiations with EDF, it is not a green light on the construction,” Business and Energy Secretary Alok Sharma told the BBC’s Today programme.
“The wind doesn’t always blow and the sun doesn’t always shine,” he said – referring to the variability of renewable power.
Business lobby group the CBI welcomed the news. “Building new nuclear capacity will give us a vital tool to help meet our global climate obligations,” said Rain Newton-Smith, CBI chief economist.
The Nuclear Industry Association’s chief executive, Tom Greatrex said: “Sizewell is a vital next step towards the net zero power mix we need for the future.
“As well as at least 60 years of constantly available clean electricity, this project will provide thousands of highly-skilled, well-paid and long-term jobs across the supply chain, at a time when they are badly needed.”
But campaigners hit out at the plans.
“The idea that it could provide value for money is pie in the sky,” said Alison Downes from the Stop Sizewell C campaign.
“Sizewell C remains too slow and expensive to help our climate emergency, and both the government and any pension funds considering the project must beware the reputational risk of investing in a still unproven reactor design.”
Caroline Lucas, Green MP for Brighton Pavilion, said: “When renewables costs are plummeting, it’s madness to waste £20bn on another nuclear white elephant,
“It will leave consumers with higher bills, destroy important habitats and unlikely to be online till the late 2030s.”
Talking about the energy white paper, Mr Sharma said: “Today’s plan establishes a decisive and permanent shift away from our dependence on fossil fuels, towards cleaner energy sources that will put our country at the forefront of the global green industrial revolution.”
The paper says that electricity demand will double due to transport and low carbon heat.
It proposes that by the mid-2030s, all newly-installed heating systems should be low carbon or to be able to be converted to a clean fuel supply.
Co-incidentally, on Monday the government faced criticism over two existing climate policies.
The Commons Environmental Audit Committee said the recently-imposed Green Homes Grant to help householders insulate their homes faced serious problems.
It said most people had difficulty using the website, and many could not find a contractor to install insulation.
Separately, the UK Energy Research Centre – a government-funded consortium of academics – said the government’s policy of banning the sales of new petrol and diesel cars by 2030 was insufficient.
It said ministers needed to tax such vehicles heavily now, or people would still be buying them in 2029 and running them for a couple of decades.
Boris Johnson has approved the start of negotiations with EDF about funding a new £20 billion nuclear power plant despite concerns that taxpayers would foot the bill for any extra costs.
The government is considering backing Sizewell C, a twin-reactor plant in Suffolk. It could generate 3.2 gigawatts of electricity, enough to provide 7 per cent of Britain’s energy needs.
The move is a vital part of the prime minister’s pledge to reach net-zero emissions by 2050. Most reactors are due to shut down this decade, leading to fears of blackouts in the 2030s.
China General Nuclear Power (CGN), a Chinese state company, has a 20 per cent stake in Sizewell C but is thought to be planning to pull out, increasing the need for new investors. The government is considering taking an equity stake in the plant amid concerns that private investment could still leave it with multibillion-pound liabilities. Taking an equity stake would allow taxpayers to benefit from any profits.
Sizewell C is now the only project in contention for government investment. The government offered to take a one-third stake in Hitachi’s Wylfa plant on Anglesey, but the Japanese company cancelled it in September.
Sizewell would be a sister project to Hinkley Point C, which EDF, the French energy company, is building in Somerset with CGN. Costs there have risen to £22.5 billion. Alison Downes, of the Stop Sizewell C campaign group, has said previously: “Sizewell C is a bad project — if EDF can’t make it work on their own terms they shouldn’t expect the British public to bail them out.”
Tom Greatrex, of the Nuclear Industry Association, said: “Any credible analysis of reaching net-zero shows you need lots of zero-carbon, including that which is not reliant on the weather.
“Nuclear construction isn’t expensive — financing nuclear projects is. Using a better model than at Hinkley would significantly reduce the cost for consumers.”
The announcement of talks with EDF comes as the government publishes its energy white paper, which includes plans to switch consumers to cheaper tariffs automatically.
Alok Sharma, the business secretary, will publish proposals today to end the “loyalty penalty”, which according to Look After My Bills, a price comparison website, costs loyal customers an average of £169 more a year. Under one plan to be tested, called “opt-in switching”, consumers will be offered a simple method to switch if their initial contract has ended. “Opt-out switching” will involve consumers being automatically moved to a more competitive rate.