Sizewell C gets final go-ahead decision

The government confirmed it will take an initial 44.9% stake to become the single biggest equity shareholder in the project. Canadian investment fund La Caisse will have a 20% stake, British multinational energy and services company Centrica 15%, and international infrastructure asset manager Amber Infrastructure will have an initial 7.6% (with an option to acquire a further 2.4% from the government exercisable within 24 months of Revenue Commencement). France's EDF announced earlier this month that it will be taking a 12.5% take in the project.

France's export credit agency, Bpifrance Assurance Export earlier proposed a GBP5 billion debt guarantee to back EDF's commercial bank loans. Alongside this investment, the UK's National Wealth Fund - the government's principal investor and policy bank - is making its first investment in nuclear energy. It will provide the majority of the project's debt finance, working alongside Bpifrance Assurance Export, to help support the building of the power plant. The government said it is providing the National Wealth Fund with additional capital to facilitate this lending to Sizewell C.

A set of procedural steps will now begin which include finalising Sizewell C's economic licence. A final statutory decision by the Secretary of State will follow, after which Revenue Commencement will be declared and the transaction completed. Centrica said it expects Revenue Commencement to take place in the fourth quarter of 2025.

Centrica noted that its investment in the project includes an agreement in principle for an initial 20-year offtake agreement for its share of Sizewell C's electricity production, and for Centrica "to provide Sizewell C with a route to market services for additional volumes".

The final investment decision also unlocks financing for British nuclear energy by adopting the Regulated Asset Base funding model, which will see consumers contributing towards the cost of new nuclear power plants during the construction phase. Under the previous Contracts for Difference system developers finance the construction of a nuclear project and only begin receiving revenue when the power plant starts generating electricity.

The plan is for Sizewell C to feature two EPR reactors producing 3.2 GW of electricity, enough to power the equivalent of around six million homes for at least 60 years. It would be a similar design to the two-unit plant being built at Hinkley Point C in Somerset, with the aim of building it more quickly and at lower cost as a result of the experience gained from what is the first new nuclear construction project in the UK for about three decades.

"Sizewell C will cost consumers around GBP1 per month as an average over the duration of construction," Julia Pyke, Joint Managing Director of Sizewell C, said. "Once operational, the project could lead to savings of GBP2 billion a year across the electricity system.

"Our plan is to deliver Sizewell C at a capital cost of around GBP38 billion [in 2024 prices]. Our estimate is the result of very detailed scrutiny of costs at Hinkley Point C and long negotiations with our suppliers. It has been subject to third-party peer review and has been scrutinised by investors and lenders and has been subject to extensive due diligence as part of the financing process. A capital cost of GBP38 billion represents around 20% saving compared with Hinkley Point C and demonstrates the value of the UK's fleet approach."

Nigel Cann, Joint Managing Director of Sizewell C, added: "Any infrastructure project of this scale will face risks and potentially disruptive events outside of its control, as well as opportunities to reduce costs. Our supply chain is strongly incentivised to keep costs down and our investors will lose potential revenue if there are overruns."

Energy Secretary Ed Miliband said. "This government is making the investment needed to deliver a new golden age of nuclear, so we can end delays and free us from the ravages of the global fossil fuel markets to bring bills down for good."

The final investment decision for Sizewell C was welcomed by the UK's Nuclear Industry Association, with its CEO Tom Greatrex, saying: "Sizewell C will be the greatest and greenest single project in the UK's history, driving investment into our industrial heartlands and providing energy security for the rest of this century. This is money well spent, creating thousands upon thousands of good jobs for communities that need them most, cutting gas imports, and providing a more competitive foundation for our economy.

“The project crucially marks the first time the UK has approved a true replica nuclear power station. That is the best way to build faster and cheaper, and we must apply those lessons to a full programme. This moment has been a decade in the making, and we cannot wait that long for the next project."