UK gov invests £100m in Sizewell C nuclear project
By Dan Colombini28 January 2022
Plans to build a new nuclear power plant in the UK have been backed by the Government, which has allocated £100 million of funding to support the continued development of the Sizewell C project in Suffolk.
The funding commitment from Business and Energy Secretary Kwasi Kwarteng will be used to continue the development of the project, which is being spearheaded by energy company EDF.
To bring Sizewell C to fruition, EDF is aiming to attract further financing from private investors and - subject to value for money and relevant approvals - the UK government.
The £100 million option fee will be invested by EDF into the project to help bring it to maturity, attract investors, and advance to the next phase in negotiations.
How will Sizewell C be financed?
In return, the government will take certain rights over the land of the Sizewell C site and EDF’s shares in the Sizewell C company, providing opportunities to continue to develop nuclear or alternative low carbon energy infrastructure on the site should the project not ultimately be successful.
If Sizewell C reaches a Final Investment Decision, the government will be reimbursed the £100 million option fee with a financing return, either in the form of either cash or an equity stake in the project.
Simone Rossi, CEO of EDF Energy, said, “We’re very pleased that the government is showing its confidence in Sizewell C which, if approved, will lower energy costs for consumers and help to insulate the UK from global gas prices.
“Together with our own investment, these funds will allow us to continue to move the project towards a financial investment decision.”
Negotiations between the government and Sizewell C project developer, EDF, have been ongoing since last year.
If built, Sizewell C would power the equivalent of around 6 million homes, as well as supporting up to 10,000 jobs in Suffolk and across the UK.
Government ministers have made a commitment to reaching a Final Investment Decision on at least one large-scale nuclear power station this parliament.
This would provide continuous, low carbon electricity at scale, strengthen Britain’s energy security and reduce exposure to volatile global gas prices, provided there is clear value for money for consumers and taxpayers.
Business and Energy Secretary, Kwasi Kwarteng, said, “In light of high global gas prices, we need to ensure Britain’s future energy supply is bolstered by reliable, affordable, low carbon power that is generated in this country.
“New nuclear is not only an important part of our plans to ensure greater energy independence, but to create high-quality jobs and drive economic growth.
“The funding announced today will further support the development of Sizewell C during this important phase of negotiations as we seek to maximise investor confidence in this nationally significant project.”