Reaction: Secretary of State publishes draft designation reasons for Sizewell C Co.

BEIS has today published draft reasons for designating NNB Generation Co (Sizewell C Co) as the first step towards the company being able to use a RAB funding model. All financial figures have been redacted. The BEIS press statement says “by publishing the draft reasons for designating Sizewell C under the RAB model, the government is going beyond the transparency requirements set out in legislation.”
Stop Sizewell C said: “It’s outrageous that ministers are hiding the cost to electricity bill payers and the public purse of Sizewell C, while claiming to be transparent. By redacting the finances, it is impossible to know if the Secretary of State’s judgement on Value for Money is sound. We fail to understand why the government would not impose conditions related to the EPR reactor technology, when it has such a catastrophic track record, and one of the only working examples has been offline for almost a year in China”
Additionally we note the following:
  • The Secretary of State is intending to designate a company which no one knows who the owners will be. EDF and the government – both apparently intending to be minority partners in Sizewell C with 20% stakes – are continuing to negotiate with each other behind closed doors. The government intends to take a special share in Sizewell C, as a means of “protecting national security interests”, yet there is no mention of removing China General Nuclear from the project.
  • The Value for Money assessment acknowledges that the (secret) figures provided by NNB require “uplift” (page 22 “Given that largescale infrastructure projects have a tendency to cost more and take longer to build than expected, the analysis has applied appropriate uplifts to these assumptions”), and conclude that “the estimated return on government investment is positive in the majority of scenarios modelled” (page 22). With no indication of the size of that majority, or the various cost burdens, it is therefore clear that the return was negative in at least some scenarios. The only cost for Sizewell C in the public domain is the original estimate of £20 billion, published over two years ago. Since then there have been major changes to the project and huge price hikes in construction materials.
  • Despite references to lessons learned at other EPR projects, there are no specific conditions linked to design adaptations that will be required for Hinkley Point C and Sizewell C’s reactors based on the experience of Taishan 1, where problems have led to the reactor being offline for almost a year. (EDF reports, p116 “In addition [to fuel failure], a phenomenon occurring between the assemblies and a component enclosing the core has been identified, which would be linked to hydraulic stresses”  and the French regulator, ASN, refers to (p14) “various anomalies observed on the cores of the EPR reactors of Taishan“. Such adaptations could have a serious impact on both cost and timescales. A government condition was attached to an (unused) offer of loan guarantees for Hinkley Point C, that the Flamanville EPR should be operating by December 2020. It is not expected to be operating until mid 2023 at the earliest. Finland’s Olkiluoto EPR is still testing at reduced capacity.
  • The government’s Dynamic Dispatch Model (DDM) methodology is secretive. The modelling should be made public and subjected to proper scrutiny by informed people in order to build the private investor confidence the project requires. Neil Crumpton of PAWB says “The DDM model is too technically and economically simplistic and not sufficiently transparent for robust engineering decision making, due diligence or public scrutiny. Decisions on multi billion projects should not be based on anything like such basis”. 
  • The document contains a number of statements we consider to be prejudicial to the DCO (planning) process, despite the Secretary of State’s claims that another BEIS minister will make that decision, due by 8 July. eg para 134: “The construction of Sizewell C is also expected to have adverse effects on ecology, fisheries and marine water quality. However, some effects will be reduced dependent on successful establishment of replacement habitats. Suffolk County Council, SZC GenCo and East Suffolk Council have agreed a funding package for mitigation and compensation measures in a Deed of Obligation, which includes up to £100m for the environment.”
  • If the Secretary of State wanted more transparency, the legislation provides the option to consult “any other person” but he has rejected this opportunity, limiting the consultation very narrowly to a small group of statutory consultees. Not even the relevant Local Authorities are included. Local communities are dismissed on the grounds that they have been extensively consulted during the DCO process, yet BEIS is well aware of multiple complaints about the poor quality of EDF’s consultations. The government has however published a public consultation on the detail how of how nuclear projects would receive their funding under the RAB model.
  • A reference to Sizewell C contributing to the government’s target of 2 million “green” jobs pre-judges the outcome of a promised UK consultation on the taxonomy of nuclear energy.
  • The BEIS press statement reiterates a claim that a RAB model for Sizewell C would cost consumers on average a pound a month, a figure that has been challenged by Stop Sizewell C working with Professor Steve Thomas, see https://stopsizewellc.org/rab.
  • There are no references to or conditions attached to lessons learned from Ukraine where nuclear sites have been targeted during the conflict.