The government is making its first direct investment in a nuclear power plant since Sizewell B in 1987, after it confirmed it was taking a £700m stake in Sizewell C in Suffolk.
The government will become a 50% shareholder in the project’s development, alongside French power company EDF. They will work together to raise capital investment in the project.
Meanwhile, the government will set up Great British Nuclear, an arm’s length body (ALB) which aims to develop a pipeline of new builds beyond Sizewell C.
The vehicle, advised by engineer Simon Bowen, will ensure that projects offer value for money.
The government has set an ambition to reduce its energy demand by 15% by 2030.
If approved, Sizewell C’s supply chain strategy will see 70% of the value of the project’s construction and operations contracts being placed with UK businesses. The investment also allows for China General Nuclear’s (GCN) exit from the project.
Regulated Asset Base
Earlier this week, business secretary Grant Shapps designated Sizewell C as the UK’s first project to use the Regulated Asset Base (RAB) funding model for nuclear. Other major infrastructure projects such as Thames Tideway Tunnel and London Heathrow Terminal 5 have already used the RAB funding model.
The government said it hoped the RAB model would cut the cost of new nuclear project finance, which is the biggest driver of nuclear project costs.
