The Department for Energy Security and Net-Zero (DESNZ) announced the funding today (25 July), stating that It will be used to prepare the site and the supply chain for the construction phase.
Key focuses will be contracting for key materials and components, and ensuring that there are enough skilled workers to deliver this major project.
DESNZ estimates that the plant will support up to 10,000 jobs nationwide at the peak of construction work and has been urged to ensure that the majority of the value for construction contracts goes to British businesses.
A final investment decision and final approval have not yet been reached for Sizewell C. Nuclear and Networks Minister Andrew Bowie said today’s announcement should speed the process.
He said: “The steps we’re taking today will speed up the development of one of our biggest projects, Sizewell C, towards final approval, which would enable construction to start as soon as possible, supporting thousands of jobs for communities in Suffolk and across the country.”
Late last year, the UK Government took a £700m stake in Sizewell C in the hopes of delivering its Energy Security Strategy commitment to deliver one new large nuclear project this decade. Today’s announcement comes in addition to this stake, but the funding had already been earmarked, edie understands. It will be drawn from DESNZ’s capital budgets for this year.
Developer EDF estimates that the project will cost £20bn to deliver and expects around 60% of the cost to be footed by private investors. The UK Government has edged Chinese investors out and some British investors, including the BT Pension Scheme and NatWest Pension Scheme, have exited negotiations. Further private funding is still being sought.
The UK Government introduced the use of a regulated asset base model to fund Sizewell C under Boris Johnson. This approach enables investors to recoup some of their costs through taxation during the construction phase.
MPs and academics have been urging Ministers to ensure that costs to the general public are kept low amid the cost-of-living crisis.
Some would like to see the project scrapped altogether. Rows continue over the potential impacts on nature, water and local communities. There are also concerns about the fact that the Government is permitted to keep much detail on finance private, due to commercial sensitivities.
Campaign group Stop Sizewell C stated: “It sticks in the throat to see ministers splashing more taxpayers’ cash months before a Final Investment Decision, while maintaining total secrecy about whether Sizewell C can achieve value for money.”
A report from the Infrastructure and Project Authority this month did not disclose progress on the delivery of Sizewell C, as it did with more than a dozen other projects overseen by DESNZ, on commercial grounds. This report raised concerns over the delivery of nuclear waste management projects.
Great British Nuclear
Under the Energy Security Strategy, the Conservative Party outlined a vision for nuclear power stations to meet a quarter of the UK’s electricity needs by 2050. At present, the proportion is around 15%.
The proportion will dip before it increases. Hinkley Point B, Heysham I and Hartlepool nuclear power stations are all scheduled to retire by the end of 2024, representing more than 4GW of nominal generating capacity. 1GW Hunterston B came offline last year. Another two large facilities are planning to come offline by 2030.
The Government’s plan to close the nuclear gap relies on both large plants and Small Modular Reactors (SMRs), which are an emerging technology. The potential benefits of these smaller sites include faster construction, lower upfront costs and less disruption for local communities.
Earlier this month, the Government opened its first round of grant funding for SMRs under its new body, Great British Nuclear (GBN). GBN was confirmed by the Government at the Budget. It is an arms-length body responsible for driving the delivery of new nuclear projects, via engagement and investment across the value chain.