FT 25 June 2020: Cost of new Sizewell C nuclear plant put at £20bn


Higher-than-expected price tag revealed for first time in planning documents

A new nuclear plant proposed on England’s east coast will cost £20bn, according to planning documents that reveal the higher-than-expected price of the project for the first time.
The developers of the proposed plant at Sizewell in Suffolk — France’s EDF and Chinese state-owned CGN — had previously indicated the power station could be built for 20 per cent less than Hinkley Point C. Britain’s first new nuclear plant in a generation is under construction in Somerset. This implied a cost of about £18bn for the Suffolk plant, called Sizewell C, after EDF last year said the price tag for Hinkley Point had risen to as much as £22.5bn. The first new-build project has suffered a string of cost overruns.
The revelation of Sizewell’s cost in extensive planning documents published on Thursday will reignite the ferocious debate around whether the UK should build large new nuclear plants.
Some backbench Conservative MPs, opposed to Chinese state involvement in critical national infrastructure, have concerns about the project because of the presence of CGN. The Chinese state-owned company is a junior financing partner on the Sizewell C project but hopes to install its own reactor technology in another proposed nuclear station at Bradwell-on-Sea, Essex.
The Financial Times reported on Wednesday that CGN, or China General Nuclear Power Corporation, was on a US list of 20 companies with links to the Chinese military compiled by the Pentagon. The list is part of an attempt by the White House and Congress to prevent Beijing from obtaining sensitive technologies as well as US funding.
EDF said in the planning documents that the cost estimate for Sizewell C includes design, construction and land costs associated with the proposed site, which is situated next to one of the UK’s operational nuclear plants, known as Sizewell B. It also takes into account “expected inflation and contingencies”, according to the document.
The company had previously claimed the cost savings on Sizewell could be delivered because it would be a “near identical copy” of Hinkley Point C. EDF said the budget detailed in the planning application includes inflation over the estimated 10 years of construction, whereas the latest estimate for Hinkley Point C — estimated to be in a range of £21.5bn to £22.5bn — was based on 2015 prices.
The 20 per cent cost saving still stood if you subtracted a fifth from the Hinkley budget and then adjusted that sum for inflation, the company added.
EDF and CGN are yet to clarify how the new plant would be funded. The UK government last year launched a consultation on a so-called regulated asset base model (RAB) — used for other forms of infrastructure such as energy networks. This would lower the cost of capital of the scheme because consumers would have a surcharge added to their energy bills before the plant was completed.  The government is yet to report back on the consultation.
Privately, some nuclear industry leaders have been making an argument for the taxpayer to take a stake in any new project.
Stop Sizewell C, a local campaigning group, said the funding statement was “a work of fiction” and described the £20bn pricetag as “totally eye-watering”.
Greenpeace UK’s chief scientist Doug Parr said the nuclear industry’s claim that it can always make the next power plant cheaper was “just never true.” He pointed out that the costs of renewable power had dropped below half those of nuclear “and just keep dropping”.