UK to Invest £700 Million in EDF’s Sizewell Nuclear Plant

Boris Johnson’s government will invest £700 million as part of a funding deal for Electricite de France SA’s Sizewell C nuclear project as part of its plan to secure future power supplies.

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(Bloomberg) —

Boris Johnson’s government will invest £700 million as part of a funding deal for Electricite de France SA’s Sizewell C nuclear project as part of its plan to secure future power supplies.

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The outgoing Prime Minister said he’s confident the funding deal for the 3.2-gigawatt plant will get “over the line” in the next weeks. The new project won’t alleviate current pressure on energy prices but is key to the UK’s goal to triple nuclear capacity by 2050. It’s only the second nuclear power station to get government approval in the last three decades and will power 6 million homes for the next 60 years if it secures private funding. 

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With the UK’s energy security under scrutiny, Johnson set out the long-term course Britain is taking in a speech Thursday, just days before he’s due to step down as premier. Russia’s invasion of Ukraine is causing prices to soar with UK households set to pay almost triple to heat their homes this winter compared with a year ago. 

Now the government has pledged its financial commitment to the project, it and part-owner EDF can seek private funding for the east coast plant. Barclays Plc and Rothschild & Co, who were hired to raise funds for the project, have spent the past months scoping interest. 

With construction due to be completed in 2035, this project won’t address the current crisis but it’s the first major UK step, since the war in Ukraine began, to provide more homegrown electricity. 

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“We need to pull our national finger out and get on with Sizewell C,” Johnson said outside the Sizewell B power station in east England on Thursday. He criticized “ the short-termism of successive British governments” for not prioritizing nuclear power in the past decades, that would have helped alleviate pressures on energy prices today.

The government is expected to use a so-called regulated asset base model to help fund Sizewell, which is supposed to encourage private investors and dilute the construction risk shouldered by the developer and taxpayers. Britain wants to develop 24 gigawatts of nuclear power, a blueprint that would require a rapid approval process before 2030.

Raising private finance may not be easy. Construction of complex atomic plants is notoriously slow, and cost overruns and delays make investors wary. 

The Sizewell C plant had an estimated price-tag of £20 billion at the start of the year, since when raw material costs have surged. Johnson acknowledged that nuclear always looks “relatively expensive” to run and build at the beginning but its cheap in comparison with fossil fuels now.