UK to take 50% stake in Sizewell C nuclear project

© Reuters.

LONDON (Reuters) – Britain will become a 50% shareholder in the Sizewell C nuclear project under a deal with its owner EDF (EPA:EDF) that will enable the two groups to buy out a Chinese backer and attract new investment to the project.

Britain confirmed that it would provide around 700 million pounds ($842 million) to Sizewell in southeast England, the first state backing of a nuclear project in over 30 years, as it approved plans for the site to help improve energy security.

The government will hold a 50% stake during the project’s development phase, while it works to seek new third-party investment to finance the construction and operation.

The agreement means China General Nuclear (CGN) will sell its 20% development stake in the project after some British lawmakers expressed concerns about China’s involvement in the country’s nuclear industry.

British finance minister Jeremy Hunt said the investment marked a key step on the journey to energy independence.

“Once complete, this mega project will power millions of homes with clean, affordable, home-grown energy for decades to come,” he said in a statement.

Energy supply has become a key focus since Russia’s invasion of Ukraine drove costs sharply higher. New nuclear production will reduce Britain’s reliance on natural gas, which made up around 45% of electricity production last year.

Britain also needs to replace ageing nuclear plants as all but one of its nuclear sites, which generate around 13% of the country’s electricity, are scheduled to close by 2030.

EDF’s Hinkley Point C in southwest England is expected to come online in 2026, the first new plant in more than 20 years. EDF has said Sizewell could cost 20% less than the cost of Hinkley which is currently budgeted at 25-26 billion pounds ($29.9 billion-$30 billion).

Sizewell will use a funding regulated-asset-base (RAB) model where companies building new plants would be paid during the construction phase, cutting down their development risk and allowing them to secure cheaper financing.

Critics of RAB say it will leave taxpayers liable for any cost over-runs and delays during construction and add costs to energy bills at a time when many people are already struggling.

The government said under its plan, 70% of the value of Sizewell C’s contracts would be placed with British businesses. It will also set up, and back, a body called Great British Nuclear to develop a pipeline of new projects beyond Sizewell C.

($1 = 0.8310 pounds)