The UK government has moved closer to participating in nuclear power generation for the first time in more than a decade after an initial £100m investment in the planned Sizewell C power station in Suffolk.
The funding announced on Thursday is part of ministers’ efforts to accelerate the project – led by France’s EDF Energy with China’s CGN as the minority partner – that has been stymied by delays. delayed as successive governments struggled to find a funding model that would attract private financing. .
The government says £100m will help bring the Sizewell project to maturity and attract other outside investors. It will act like a convertible loan, which will trigger when Sizewell C comes to a final investment decision, which is expected over a three-year period.
At that point, the government will either take a stake in the project or be reimbursed. Then, if EDF fails to carry out the plan, the government will take control of the subsidiary established to build the power plant and the designated site on the Suffolk coast for the plant.
Simone Rossi, chief executive officer of EDF Energy, welcomed the investment, which he said coupled with the French company’s capital would “allow us to continue moving the project in the direction of a decisive financial investment”.
The UK government has not had any involvement in nuclear power production since sold its 36% stake in British Energy – which owns eight UK nuclear plants – to EDF in 2009.
The investment comes as ministers continue to face a growing cost of living crisis, including soaring energy bills due to record gas prices. These pressures have prompted continued efforts to galvanize to kickstart the development of lower carbon power generation.
Prime Minister Boris Johnson has pledged to make nuclear power a key part of achieving the UK’s climate target of net-zero emissions by 2050.
Despite successive governments’ pledges over the past decade to build a new generation of nuclear power plants, most projects have collapsed because the private sector is unwilling to finance them.
The government first proposed in 2018 that it prepare receive shares in new nuclear power plants.
Most of the UK’s existing fleet of aging reactors, which provide 16% of the country’s electricity, are being retired this decade, with the last to close in 2035.
Government says £100m in funding separate from £1.7bn allotment to Sizewell C in October to help bring the project to a final investment decision. It added a larger allocation would have to be negotiated in the future with the EDF.
In the longer term, the UK plans to use a funding model, known as the regulated asset base model, to pay for project construction. This will add an additional revenue to the household energy bill to cover the cost of building the plant.
The government hopes that its financial involvement in Sizewell C will help incentivize outside investors to provide additional funding when it seems likely. overthrow CGN from the project, as part of a broader push against China’s involvement in UK critical infrastructure.
In a statement, the government said no decision had yet been made on the “final configuration” of investors in the project.
Alison Downes, from the protest group Stop Sizewell C, said the statement was especially silent on CGN. “The elephant in the room is still China – this announcement doesn’t mention CGN or seem to do anything to get rid of them,” she said.
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