[LONDON] The UK announced final approval for the Sizewell C nuclear power plant after securing private investment in the £38 billion (S$65.7 billion) project that will help advance the government’s energy and climate goals.
The British government will retain a minority stake of around 45 per cent, while other investors include French state-owned Electricite de France, Caisse de Dépôt et Placement du Québec, Centrica and Amber Infrastructure Group. The major backing from private investors in the project is seen by the government as a key victory as the UK tries to drive investment and economic growth.
The government said it will ensure the impact on consumer bills is limited to an average of around £1 per month over the duration of Sizewell C’s construction.
It’s a milestone for UK Prime Minister Keir Starmer’s government to drive investment in low-carbon electricity supply to cut emissions and boost economic growth. EDF has said the two reactors in Suffolk on England’s east coast will supply power to 6 million households for about 60 years.
“Today we announce an investment that will provide clean, homegrown power to millions of homes for generations to come,” UK Energy Minister Ed Miliband said in a statement on Tuesday (Jul 22).
Plans to develop Sizewell C go back more than a decade. Different UK governments have struggled to come up with a way to finance the project, before choosing a hybrid model of public and private capital. And since then, costs for new nuclear projects in the UK have soared.
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In recent weeks, it appeared that Brookfield Asset Management would take a minority stake, but it wasn’t among the final shareholders unveiled on Tuesday.
Sizewell’s final ownership breakdown has the UK government with 44.5 per cent, La Caisse with 20 per cent, Centrica 15 per cent and Amber with 7.6 per cent. EDF will also hold a 12.5 per cent stake that they announced earlier this month.
The UK’s National Wealth Fund will provide the majority of the project’s debt finance, while France’s export credit agency has proposed a £5 billion debt guarantee to the power station. Centrica said in a separate statement that it expects a rate of return of about 12 per cent.
“The UK needs more reliable, affordable, zero carbon electricity, and Sizewell C will be critical to supporting the country’s energy system for many decades to come,” Centrica chief executive officer Chris O’Shea said in a statement.
Sizewell C is a copy of the other plant under construction in Britain – Hinkley Point C in Somerset. The latter has been repeatedly delayed, including from disruptions related to the Covid-19 pandemic. The plant might not be completed until after 2030, and the price tag has more than doubled to over £40 billion.
Developers promise that Sizewell C can be built faster and more cheaply than its predecessor because of the efficiency of repetition. If the project is delivered for the £38 billion announced today, it would be about 20 per cent cheaper than Hinkley, according to the UK government’s statement. BLOOMBERG
