Final Investment Decision for Sizewell C Expected at Anglo-French Summit

Key Developments on Sizewell C Nuclear Power Plant

The anticipated final approval and financial arrangements for the Sizewell C nuclear power plant in Suffolk are set to be disclosed during the Anglo-French summit taking place in London from July 8 to July 10. UK Prime Minister Keir Starmer is expected to announce that the government has secured substantial financial backing, facilitating the long-awaited final investment decision (FID).

This announcement, delayed by about a month from earlier expectations, follows HM Treasury's previous indications that the FID would come at the conclusion of the Spending Review on June 11. This updated timeline allows the co-owners of the project, the UK government and French energy company EDF, additional time to secure financial commitments from private investors.

Investor Interest and Financial Landscape

Among the investors likely to bid are notable firms such as the insurance company Rothesay—with backing from Singapore's GIC infrastructure fund—Canadian pension fund CDPQ, Amber Infrastructure Partners, Brookfield Asset Management, pension fund USS, Schroders Greencoat, and Equitix. Additionally, the British Gas owner Centrica has shown interest in participating in the investment process.

Potential investors have expressed that the terms for acquiring a stake in Sizewell C are seen as "generous," suggesting that the government has made substantial efforts to enhance the project's attractiveness.

Project Status and Controversies

The Sizewell C facility has received all requisite planning approvals to commence construction, officially activating its development consent order (DCO) in January 2024 and obtaining its nuclear site license in May of the same year. Preparations for construction have already incurred over £2.5 billion in awarded contracts, with the UK government committing £6.4 billion to the initiative, appropriately constraining EDF’s involvement in the project.

Even with no significant construction yet initiated, preparatory works such as artificial ground freezing have been completed. Aerial photographs from April vividly illustrate notable alterations in the landscape in anticipation of the upcoming construction phases.

However, the project remains a subject of debate due to its escalating costs. Recent reports suggest that development expenses could soar to £40 billion by 2025, a figure significantly higher than the £20 billion estimate shared in 2020. The government has disputed this raised estimate, reinforcing its commitment to the project.

Funding Model and Consumer Impact

Funding for Sizewell C will initially come from private investors, with repayments structured via a regulated asset base (RAB) model. This financial arrangement mandates that consumers incur a premium on their electricity bills as a means to reimburse investors. Initially estimated at merely £1 per month, inflationary pressures may result in this premium more than doubling, a prospect that has sparked concern among consumers.

Criticism from Advocates Against Sizewell C

Critics, including Alison Downes, a founder member of the Stop Sizewell C campaign, have condemned the project, referring to it as a “£40 billion folly.” Downes argues that by commencing construction and allocating £6.4 billion of taxpayer money without securing the FID, the government has eroded its negotiating leverage, effectively offering private investors excessive incentives at the taxpayers’ expense. Additionally, she warns that consumers will inevitably shoulder the financial burden through increased energy bills, receiving a "nuclear tax" until the plant becomes operational.