Told you so: Financial Times follows NFLAs lead on Sizewell C cost estimate.

16 Jan 25 – https://www.nuclearpolicy.info/news/told-you-so-ft-follows-nflas-lead-on-sizewell-c-cost-estimate/

It is always nice when a media cornerstone of the finance world follows your lead in doing its sums – but that is what the Financial Times did yesterday in publishing an article indicating that the estimated cost of completing the new nuclear plant at Sizewell C will be £40 billion, something the NFLAs have been saying for ages.

One rule in nuclear is that the construction cost for new plants will always be far higher than the first estimate. And there has been no better example of this truism than that of Sizewell C’s sister plant, Hinkley Point C in Somerset, where an initial estimate of £18 billion for completion has now doubled to £34 billion (at 2015 prices).

It was hardly surprising that the FT reported that the final bill is more likely to be nearer £40 billion after speaking to ‘people close to negotiations over flagship energy scheme’; which are understood to be ‘one senior government figure and two well-placed industry sources.’ This figure is double that made in 2020 reflecting the recent surge in construction costs, and the inevitable delays and cost overruns will inevitably add to the eventual total.

The Sizewell C site presents its own costly challenges, namely a need for considerable expenditure on coastal defences as the East Coast will be increasingly subject to inundation and storm surges because of climate change and the need to provide in this water-stressed region for the provision of potable water with the likely installation of a dedicated desalination plant.

The British Government has already spent, or pledged, up to £8 billion in public funds to carry out preparatory groundwork around the site. Although private investors are being sought to finance the cost of construction, under the Regulated Asset Base being adopted by the British Government for the construction of any new nuclear plants, British electricity customers will ultimately have to bear the cost as the developer will be reimbursed these construction costs in stages through applying a nuclear levy to bills.

However, the Final Investment Decision to give the project the go-ahead has yet to be made. This is only expected in the late Spring after the completion of a Spending Review of overall government spending so there is still time for the Chancellor Rachel Reeves to stop it.

Local campaign group Stop Sizewell C is asking supporters to sign a petition to do so. The link to the petition is https://action.stopsizewellc.org/save-billions-cancel-sizewellc

Stop Sizewell C’s message to the Chancellor, via the Treasury, is: “As you carry out your multi-year spending review, I am reminded of your statement to Parliament during your mini-budget last year – “If we cannot afford it, we cannot do it”. I appreciate that you face many difficult choices, but with the Financial Times reporting that Sizewell C will cost at least £40 billion, I urge you not to throw more taxpayers’ money at this expensive, risky project that will raise energy bills during its lengthy and unpredictable construction. For alternative strategies that will help meet the UK’s 2030 target and create many thousands of jobs, I urge you to focus on renewables and energy efficiency.”

The NFLAs endorse this petition as it mirrors our position.

At present, the British Government is the majority stakeholder, but long-term only wishes to retain 20% as Ministers intend to offload much of their stake to private investors. So far however, no one is definitively biting, with mixed messages about interest from Centrica, British Gas’s parent, and Gulf States’ sovereignty funds.

As a second whammy to government hopes that more private sector partners will become involved, yesterday, the French State Auditor, the Cour des Comptes, criticised the expenditure already made by French state owned EDF on Hinkley Point C in a published report which suggested this could compromise investment in domestic nuclear power expansion plans and that “EDF should not take a final investment decision on Sizewell C before achieving a significant reduction in its financial exposure to Hinkley Point C.”

Stop Sizewell C is asking supporters to write to prospective investors asking them not to do so. The relevant links to take this action are shown below:

Amber Infrastructure: action.stopsizewellc.org/amber
Equitix: action.stopsizewellc.org/equitix
Schroders Greencoat: action.stopsizewellc.org/greencoat
Emirates Nuclear Energy Corporation: action.stopsizewellc.org/emirates
Centrica: action.stopsizewellc.org/centrica

The NFLAs has previously written to these prospective investors and endorse this action.

Finally Stop Sizewell C is petitioning the new Office of Value for Money’s independent Chair, David Goldstone, to call in the Sizewell C project for urgent scrutiny. Initial feedback from the Treasury indicated that Sizewell C would be examined, but more recent correspondence with officials has been less committal.

Supporters are asked to follow the NFLA’s example and sign the petition at https://action.stopsizewellc.org/valueformoney

Ends://..For further information, please contact NFLA Secretary Richard Outram by email to richard.outram@manchester.gov.uk