Sizewell C faces calls for more scrutiny of costs ahead of Final Investment Decision

New Civil Engineer, 02 Jan, 2025 By Tom Pashby

The cost of Sizewell C should face scrutiny from the government’s newly-formed Office for Value for Money (OVfM), according to concerned parties.

Ecotricity founder and CEO Dale Vince wrote a letter to the OVfM “formally” requesting it start “a process” for assessing Sizewell C’s value for money, while a member of the House of Lords and campaigners have also expressed concern over the cost.

The government has already committed billions towards the Suffolk nuclear power station, despite its intention for it to be privately funded. The final investment decision (FID) is the ultimate confirmation that the power station will move ahead, with details of who will pay for it and how. This has been continually pushed back, most recently because of the summer’s General Election.

It now expected that FID will be made at the conclusion of the government Spending Review in the spring………………………………………………………………………………………………………………..

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Sizewell C faces calls for more scrutiny of costs ahead of Final Investment Decision

02 Jan, 2025 By Tom Pashby

The cost of Sizewell C should face scrutiny from the government’s newly-formed Office for Value for Money (OVfM), according to concerned parties.

Ecotricity founder and CEO Dale Vince wrote a letter to the OVfM “formally” requesting it start “a process” for assessing Sizewell C’s value for money, while a member of the House of Lords and campaigners have also expressed concern over the cost.

The government has already committed billions towards the Suffolk nuclear power station, despite its intention for it to be privately funded. The final investment decision (FID) is the ultimate confirmation that the power station will move ahead, with details of who will pay for it and how. This has been continually pushed back, most recently because of the summer’s General Election.

It now expected that FID will be made at the conclusion of the government Spending Review in the spring.

Meanwhile, earthworks are underway at the site (pictured).

What is the Office for Value for Money?

The creation of the OVfM was announced in the new Labour government’s Autumn Budget 2024. It is a “time-limited HM Treasury Unit”, according to its website, with two roles.

Related questions you can explore with Ask NCE, our new AI search engine.

• What is the current status of the Sizewell C nuclear power project?
• How much has the UK government committed to the Sizewell C project so far?
• What are the concerns about the cost of the Sizewell C project?
• How does the regulated asset base funding method work for nuclear power projects?
• What is the expected timeline for the Final Investment Decision on Sizewell C?

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Its first role is to “provide targeted interventions through the multi-year Spending Review, working with government departments.

“This will include conducting an assessment of where and how to root out waste and inefficiency, undertaking value for money studies in specific high-risk areas of cross-departmental spending, and scrutinising investment proposals to ensure they offer value for money,” the government said.

The second role it has responsibility for is to develop recommendations for “system reform” which will “underpin a ruthless focus within government on realising benefits from every pound of public spending”.

It is chaired by David Goldstone, a non-executive director (NED) at the Submarine Delivery Agency, as well as a NED at HS2 Ltd acting as a representative of the Treasury, and he is a member of the Projects & Programmes Committee of Great British Nuclear.

The UK Government characterises his role at OVfM as the “independent” chair.

Vince’s letter to the OVfM

Vince, who was awarded an OBE (Order of the British Empire) for services to the environment and to the electricity industry in 2004, wrote a letter to Goldstone requesting scrutiny of Sizewell C.

In the letter, Vince said: “Sizewell C has already cost UK taxpayers £3.7bn – that’s before a Final Investment Decision (FID) has been made and a further £2.7bn has been allocated for 2025- 26.”

Soon after the Autumn Budget, the Treasury told NCE that the £2.7bn mentioned in the Budget documents is not new funding but rather a sum that would be invested either via the previously announced £5.5bn Devex scheme, or through a separate FID subsidy scheme that would be established at the point of FID.

Vince continued: “If Hinkley Point C is anything to go by, Sizewell C really should have rigorous financial scrutiny.”

He warned that the cost of Hinkley had “ballooned” to £46bn and mentioned delays to the construction of the nuclear power plant.

“Due to a novel funding method (regulated asset base) a lengthy construction timeline for Sizewell will saddle consumers with higher bills long before it delivers a single unit of electricity at a time when there is clear evidence that we can secure a cleaner, cheaper energy future without nuclear,” he said.

Vince went on to ask if the remit of the OVfM covers Sizewell C and said: “I’d like to formally request you start a process and please let me know how we can take part.”

Peer says rumours swirl about government having ‘second thoughts’ about Sizewell

Backbench Conservative peer Lord Howell of Guildford asked the government on 7 October 2024 “whether a Final Investment Decision (FID) regarding Sizewell C will be scrutinised by the new Office of Value for Money, prior to the FID being taken”.

Howell was energy secretary in Margaret Thatcher’s government which supported the construction of nuclear power plants.

The government responded on 21 October saying: “The Office for Value for Money is in the process of being established and appointing an independent Chair”. The OfVM was officially launched on 30 October in the Budget.

On 31 October, NCE asked the Treasury under the Freedom of Information Act “what plans the Office for Value for Money has to evaluate the economic benefits of Sizewell C against public spending and whether the assessment is due to, or has started, before the final investment decision?”

The Treasury said it “does not hold information within the scope of [the] request”.

NCE asked Howell if he planned to ask the question again after Goldstone had been appointed.

Howell told NCE he didn’t plan to, adding: “I fear that direct questions will reveal little or nothing.

“Is the new government having second thoughts? Some say they are.”

Campaigners say lack of scrutiny ‘inexcusable’

Stop Sizewell C executive director Alison Downes said: “Billions of pounds of taxpayers’ money have already been spent on Sizewell C, and much more will certainly be required.

“Coupled with the fact that no project this risky has ever had its lengthy and unpredictable construction bankrolled by British energy bill payers, not submitting Sizewell C for detailed scrutiny by the Office of Value for Money would be completely inexcusable.”……………………………………………. more https://www.newcivilengineer.com/latest/sizewell-c-faces-calls-for-more-scrutiny-of-costs-ahead-of-final-investment-decision-02-01-2025/

January 4, 2025 - Posted by Christina Macpherson | business and costs, UK