Cost of Sizewell C nuclear project expected to rise close to £40bn

Stay informed with free updates

Simply sign up The power of the United Kingdom myFT Digest — delivered straight to your inbox.

The final price tag for building the planned Sizewell C nuclear power station in Suffolk is likely to reach close to £40bn, according to people close to negotiations over the flagship energy scheme.

The sum is double the £20bn estimate given by developer EDF and the UK government for the project in 2020, reflecting rising construction costs as well as the added impact of delays and costs at sister site Hinkley Point C.

The higher estimate could raise questions about the government’s strategy for a nuclear power revival at a time of stretched government funding and cost-of-living concerns.

EDF says that once operational, Sizewell C will be able to provide the equivalent of around 6mn homes with low-carbon electricity for 60 years.

According to officials, the Treasury will decide whether to proceed with the project at this year’s multi-year spending review.

The UK government and French energy group EDF were early backers of Sizewell C but are trying to raise billions of pounds from new investors, a process that is taking longer than planned.

Earlier this month the Department for Energy Security and Net Zero (Desnz) said it could not release current cost estimates for the project as it was “commercially sensitive”.

But a senior government figure and two well-placed industry sources said a reasonable estimate for the cost of building Sizewell C would be around £40 billion in 2025.

The government has already committed £3.7bn of state funding to the project. Ministers had planned to reach a final investment decision by the end of 2024 but were forced to delay it until spring 2025. There is now industry speculation that any deal could slip beyond the autumn

Potential investors in Sizewell C include Centrica, Schroders Greencoat, Emirates Nuclear Energy Corporation and Amber Infrastructure Group.

According to accounts published at Companies House last week, Sizewell C “continues to make good progress in discussions with private investors”.

Alison Downs, executive director of campaign group Stop Sizewell C, called on the government to “come clean” on the “huge true cost” of the scheme, which households will pay for its construction up front through a levy on energy bills. “This secrecy around Sizewell C is inexcusable.”

Dale Vince, a major Labor Party donor and founder of green energy company Ecotricity, has written to the government’s new Office for Value for Money to warn that the construction of Sizewells “will saddle customers with high bills long before a single unit of electricity is delivered”.

Speaking to the Financial Times, he added: “Nuclear is very expensive, very slow – and very expensive to maintain at the end of its life.”

Nuclear power currently provides around 14 per cent of the UK’s electricity and many experts say it will be key to reducing carbon dioxide emissions to net zero by 2050.

However, all but one of Britain’s current aging fleet will be closed by March 2030, possibly sooner if planned life extensions cannot proceed.

Only one new nuclear power station, Hinckley Point C in Somerset, is currently being built in the UK but it is delayed and over budget.

The project will start production as early as 2029 and will cost up to £46bn. This compares with initial expectations from 2016 that it would start by the end of 2025 and cost £18bn.

Sizewell C uses the same European pressurized water technology as Hinckley Point C. EDF says Sizewell C should be much cheaper in part because lessons will be learned and the supply chain will evolve further.

It is being built using a different financial framework, the managed asset base model, which is used with financing in the water sector. New Thames Tideway Sewage Tunnel. Developers began paying during construction from consumer bills instead of waiting for the plant to be completed.

But there is skepticism within the government about how much cheaper Sizewell C will be compared to Hinkley Point C.

Progress on the project has been partly hampered by the recent resignation of Rob Holden as chair of Sizewell C Ltd due to ill health.

A spokesman for Desnz said he did not recognize the “presumptive” figure of £40bn for Sizewell C’s costs.

“The project is expected to reduce the cost of the electricity system, increase our secure residential electricity supply and lead to major investments nationwide.”