UK Energy Secretary Ed Miliband has signed the final investment decision (FID) for the Sizewell C (SZC) NPP in Suffolk, with construction costs put at £38bn ($51bn).

The plant will feature two EPR reactors producing 3.2 GWe for at least 60 years, and is similar in design to the Hinkley Point C (HPC) NPP under construction in Somerset.

The previous official figure for the project was £20bn, but SZC joint managing director Julia Pyke said earlier estimates did not account for inflation or risk.

The UK government is taking an initial 44.9% stake, making it the biggest equity shareholder. Canadian investment fund La Caisse is taking 20%; UK energy and services company Centrica 15%; international infrastructure asset manager Amber Infrastructure 7.6% (with an option for a further 2.4% from the government); and France’s EDF 12.5%. A proposed £5bn debt guarantee from France’s export credit agency, Bpifrance Assurance Export, may back EDF’s commercial bank loans.

Funding will be a mixture of equity and debt – £8.8bn in equity from the government and the other investors, and £36.6bn in debt provided by the National Wealth Fund (NWF). The total debt of more than £45bn allows for a buffer or contingency in case costs overrun. Interest payments will be part funded by a £1 monthly levy on electricity users or the duration of the construction phase under the Regulated Asset Base funding model.

HPC, by contrast, was funded using the Contracts for Difference system whereby developers finance construction and only receive revenue once the plant is operating.

The Department for Energy Security & Net Zero (DESNZ) said the deal represents the UK’s “most significant public investment in clean, homegrown energy this century” and “ends an era of dithering and delay to give Sizewell C the go-ahead”.

The investment builds on lessons learnt from the construction of HPC and represent a saving of around 20% by comparison demonstrating the value of building a virtual replica project.

Julia Pyke, Joint Managing Director of Sizewell C, said: “Once operational, the project could lead to savings of £2bn a year across the electricity system.”

At peak construction, Sizewell C will support 10,000 jobs directly employed in the project, and thousands more in the supply chain, as well as creating 1,500 apprenticeships. Some 70% of the value of construction is set to be awarded to British businesses. Sizewell C Ltd anticipates it will have 3,500 UK companies in its supply chain across the country.

Energy Secretary Ed Miliband said: “This government is making the investment needed to deliver a new golden age of nuclear, so we can end delays and free us from the ravages of the global fossil fuel markets to bring bills down for good.”

John Flint, National Wealth Fund CEO explained: “We have a critical role to play in solving financing problems across a broad waterfront of relevant sectors and Treasury has recognised that …by providing the NWF with additional capital required to enable our lending to Sizewell C. As the government’s flagship investor and policy bank, it is a privilege to be able to play such a significant role in a project of such national importance.”

Gavin Tait, CEO at Amber Infrastructure Group said Sizewell C is a “landmark example of how the public and private sectors can invest together to strengthen national energy security and support future economic growth”.

Chris O’Shea, Centrica Group Chief Executive, said Sizewell C “is a compelling investment for our shareholders and the country as a whole, and I look forward to working with our world-class partners, EDF, La Caisse, Amber Infrastructure Group and the UK government, to make the project a great success”.

Simone Rossi, CEO of EDF in the UK, welcomed the government’s announcement. “The confirmation of the private investment is very positive and reflects the growing attraction of the role of nuclear power in the energy transition. It could also pave the way for the financing of future large nuclear projects in the UK.”

Emmanuel Jaclot, Executive Vice-President and Head of Infrastructure at La Caisse said: “Our investment demonstrates our confidence in the UK market – our largest destination outside North America – and aligns with our commitment to the energy transition and decarbonisation, enabled by our long-term capital and active ownership.”

In the wake of the government announcement, French engineering company Assystem pledged to double its UK workforce. “Assystem has been a key partner to EDF for over 50 years and has announced plans to create 1,000 new engineering, digital and project management jobs by 2030 to support the delivery of Sizewell C,” the company said. “The project crucially marks the first time the UK has approved a true replica nuclear power station. That is the best way to build faster and cheaper, and we must apply those lessons to a full programme. This moment has been a decade in the making, and we cannot wait that long for the next project.”

A different view was expressed by Douglas Parr, the policy director for Greenpeace UK. “The only significant difference between the slowly unfolding economic blunder of Hinkley C and the forthcoming economic disaster of Sizewell C is that Hinkley’s predictable construction problems, delays and cost overruns were borne by EDF,” he said. “EDF know they can’t afford to make that mistake again, and so this time those costs will be borne by you, the British public.”

Source: UK confirms FID in Sizewell C – Nuclear Engineering International