EDF has threatened to cease the development of Sizewell C unless the government agrees this year to come up with a viable funding model for the proposed nuclear plant in Suffolk.
The boss of the group’s UK arm, EDF Energy, has previously claimed the power station could be built for around a fifth less than the Hinkley Point C plant currently under construction in Somerset by “copying and pasting” its design.
Chief executive Simone Rossi has now reportedly warned that the government must make a commitment on funding to prevent a lengthy lull between the two projects, which would leave its workforce idle and put the promised savings in jeopardy. He said a delay of six months could be overcome, but a gap of two years or more would be problematic.
“This is the year where we need to understand whether this whole thing is really feasible or not,” he told The Times. “If we were to conclude that maybe it’s not feasible, then at that point maybe we say we are not in a position to continue the project.”
Rossi said it is not necessary for the government to reach a specific agreement in 2018 but EDF must receive assurances that a deal can eventually be struck.
According to the article, the company is seeking a regulated asset base model along the same lines as the one used for the Thames Tideway tunnel, which would see developers start receiving revenues whilst construction is still underway.
Speaking to reporters on a visit to the Hinkley Point C construction site in February, Rossi said he hoped a new financing model and a proven design would enable pension funds and other institutional investors to help fund Sizewell C. He claimed initial investigations had uncovered a “strong appetite” from them to take part in the project.
The National Audit Office has previously chastised the government for failing to examine alternative financing models for Hinkley Point C, saying the deal it concluded “locked consumers into a risky and expensive project with uncertain strategic and economic benefits.”
The spending watchdog said the overall cost to consumers could have been lower if they or taxpayers had borne some of the construction risks and urged the government to consider this approach for future nuclear projects.