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    What is Sizewell C and how will it be paid for? Campaigners challenge new plant

    March 23, 2023 - August Graham and Nuray Bulbul


      Campaigners have told the High Court that the Government's decision to support the Sizewell C nuclear power plant plan was "unlawful" andshould be overturned.

      Business Secretary Grant Shapps announced a £700 million Government investment in the Suffolk coast project last year.

      Protest group Together Against Sizewell C said the Government neglected to consider potential environmental effects. But the Government said it made "legitimate planning judgments".

      The two-reactor plant was given Government approval in July of last year, when Boris Johnson was prime minister, and EDF Energy said it could supply 7 per cent of the UK's electricity requirements.

      So what is Sizewell C, can it help with bills this winter, and where will the rest of the money for the plant come from?

      What is Sizewell C?

      Government-owned French energy giant EDF wants to build a 3.2-gigawatt nuclear power plant in Suffolk, north-east of Ipswich.

      It would be the third plant at the site, after Sizewells A and B. Construction on the first Sizewell nuclear reactor started in the early 1960s, and the site was producing before the end of the decade.

      Sizewell B came online in the mid-1990s and is still running. Under current plans, the station will shut in 2035, but EDF is exploring a plan to extend it for another 20 years.

      Sizewell C would be the successor project. Its journey started more than a decade ago when the Government chose the location as one of eight sites that could be used to house new nuclear plants.

      It would produce enough electricity for around six million homes when completed.

      How will it be paid for?

      That is the million-dollar, or rather billion-pound, question. And there is no answer to this yet.

      The Government in September promised to put £700 million towards the project. However, that is merely a small amount of the estimated final cost, which is likely to run above £25 billion.

      The Government could up its investment in the future. It has the right to buy a 20 per cent stake in the project after signing a deal in June.

      The other owners are EDF and China General Nuclear Power. But the Government is reported to be keen to ensure that the Chinese company is removed from the project, which could be an important part of UK energy security.

      EDF will provide some of the cash, probably also around 20 per cent. However, 60 per cent of the funding has reportedly not yet been secured.

      The Financial Times reported in June that bank Barclays has been hired to hunt for investors who might be willing to stump up the cash.

      How will the investors get their money back?

      Most of the returns for the investors will come when they sell electricity to businesses and households in the UK.

      However, the Government has also said that it will allow investors in new nuclear to get money through the so-called Regulated Asset Base model.

      This funding model, which has also been used for the Thames Tideway (a 15-and-a-half-mile super sewer under the Thames), would add a small extra monthly charge to every energy bill in the country while the plant is being built.

      Proponents of the system say this will reduce risks for investors, and therefore they will receive lower-interest loans from their banks.

      But opponents say that the system has also led to disaster elsewhere, and that the cost would be added to already record energy bills immediately, rather than in a decade.

      “The funding model adopted to pay for it was tried in the USA, and North Carolina households are still paying for a nuclear reactor that was never built as the company went bust,” said Dr Doug Parr, chief scientist at Greenpeace UK.

      Will Sizewell C reduce my energy bill?

      Not in the short term. The funding model means it is likely to add an extra few pounds to the average energy bill when construction starts.

      However, in the long run prices are likely to fall because of the project, says Aurora Energy Research, an expert outfit founded by University of Oxford professors.


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