The government has committed £100 million towards the development of the Sizewell C nuclear power plant project in Suffolk.
The funding, separate to the £1.7 billion announced for new nuclear in last year’s Spending Review, is described as aiming to help EDF bring the project to maturity, attract investors and advance to the next phase in negotiations.
It comes as the Nuclear Energy (Financing) Bill, which will enable a Regulated Asset Base (RAB) funding model framework for new nuclear projects, passes through Parliament. EDF hopes to ultimately use the RAB model to fund the project, which it estimates will cost £20 billion in total.
The new commitment from the government represents its purchase of a combined option in relation to shares in the Sizewell C GenCo and the land earmarked for the site.
The announcement stresses that if Sizewell C is successful, the £100 million would be returned either in cash or equity. If the project does not succeed, the government could requisition the land, demand shares in Sizewell C or ask EDF for the money back along with the financing return.
It reiterates the government’s view that “nuclear power has a key role to play as we work to strengthen Britain’s energy security and reduce our exposure to volatile global gas prices”.
It has already pledged to bring at least one large-scale nuclear project to a final investment decision in this Parliament.
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.”
Simone Rossi, chief executive of EDF Energy, said he was pleased the government was showing confidence in Sizewell C.
He added: “Sizewell C will benefit from being a near replica of Hinkley Point C in Somerset which is more than five years into construction and making great progress in the challenging context of the Covid pandemic. Sizewell C will provide a huge economic boost to East Suffolk where it already enjoys the support of most local people. It will also bring new opportunities for thousands of nuclear supply chain companies up and down the country.”
Once operational, Sizewell C would produce 3.2 GW of electricity, powering the equivalent of around 6 million homes. EDF has estimated the project would support up to 70,000 jobs.