The government is to provide £100 million of funding to EDF’s 3.2GW Sizewell C nuclear plant in Suffolk.
In its announcement of the funding, the government said that nuclear power has a key role to play in strengthening Britain’s energy security and reducing its expose to volatile global gas prices.
In September, during one of the first months of the high prices, the government stressed the need for a “strong, home-grown renewable energy sector” to reduce reliance on global gas prices.
The new funding for the Sizewell C nuclear site will be used to continue the development of the project, with an aim of attracting further financing from private investors and, subject to value for money and relevant approvals, the government.
Ministers have made a commitment to reach a Final Investment Decision on at least one large-scale nuclear power station this parliament. 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 cash or an equity stake in the project.
As it stands, the £100 million will be invested by EDF into the project to help bring it to maturity, attract investors and advance to the next stage of negotiations.
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, with this providing opportunities to continue to develop nuclear or alternative carbon energy infrastructure on the site should the project not be successful.
Negotiations between the government and EDF have been ongoing since last year. If built, Sizewell C would support 10,000 jobs in Suffolk and across the UK.
EDF submitted its application for the site to the Planning Inspectorate in May 2020. It is to be constructed as a near-replica of its Hinkley Point C plant, which itself is still under construction.
Last year, it was announced Hinkley Point C would be delayed by a further six months due to disruption from COVID-19, having already faced delays and rising costs. As of January 2021, it is expected the project will cost between £22 billion to £23 billion, an increase of around half a billion on a previous increase announced in 2019.
Earlier this month, EDF’s Hunterston B nuclear power station closed after almost 46 years, while in 2021 EDF announced it was closing its Dungeness B nuclear power station seven years early. Dungeness B had already been in an extended outage since September 2018 due to technical challenges.
“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,” 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.”