Sizewell C proves to be a turn-off for City giant Legal & General
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