What the election means for Sizewell C

This government had made a commitment to reach a Final Investment Decision (FID) on Sizewell C within the current parliament, but a 4 July election makes this look to be essentially impossible. Sizewell C’s future is therefore dependent on the election outcome. See bullet points for more details.
Stop Sizewell C said: “The impossibility of a Final Investment Decision on Sizewell C being made before the election lets the Conservatives off the hook for signing away another HS2. It also presents a likely Labour government, looking to drive down bills and reach net zero by 2030, an opportunity to focus on more cost effective renewable projects. We are going to do everything in our power to ensure that this election signals the death knell for slow, expensive, risky Sizewell C.”
  • Stop Sizewell C understands that the capital raise is still ongoing, and final bids have yet to be submitted, reportedly due by the end of June. A likely change in government may increase the risks perceived by investors and influence or even deter bids. The capital raise will be subject to a Value for Money (VfM) assessment. If, as reported, investors are seeking high returns, the VfM – and therefore the capital raise – is likely to fail.
  • In this event, Ministers would have to decide whether to take a FID with the taxpayer as Sizewell C’s majority stakeholder. An additional VfM assessment will be required as well as multiple internal procedural steps and approvals.
  • While Labour’s stated position is in favour of Sizewell C, the implications of having to make a FID with billions of taxpayers’ money and which would additionally push much of the risk and cost of the project onto household bills via use of the RAB funding model, in addition to the impossibility of Sizewell C contributing to the goal of net zero by 2030, may give pause. Rising costs and inflation make the current government’s estimate of a Sizewell C RAB costing consumers on average £1 month improbable.
  • A new government would be expected to conduct a Spending Review ahead of an autumn budget, which seems likely to also lead to a pause before any decision about a Sizewell C FID was made.
  • Sizewell C Chair Rob Holden acknowledged the risk associated with a change in government telling the The Times recently “Clearly there has to be a risk there. There is with any big decision on this.” In the same interview Rob Holden also highlighted that further widening of the gap between Hinkley Point C and Sizewell C would reduce any replication “benefits”.
  • Even in the very unlikely event a FID could be fast-tracked, pre-election guidance states that Ministers should “observe discretion” in making big announcements. This must be especially pertinent if a large commitment of taxpayers’ money was necessary for a Sizewell C FID. Having sucked up £2.5bn in taxpayers’ money already, which we understand is all committed, it’s possible yet more funds will be allocated to keep the project going over this period of uncertainty.