The UK government has announced it is to invest £679m and take a 50% share in the proposed Sizewell C nuclear power plant project.
The government becomes an equal partner of Électricité de France (EDF) in the project, enabling the exit of Chinese state-owned China General Nuclear (CGN).
EDF will also provide additional investment to match the government’s stake in the project.
To help finance the project’s estimated £20bn construction cost, the government will work with the project company to attract new third-party investment.
Sizewell C has been designated as the UK’s first project to use the newly established regulated asset base (RAB) funding model for nuclear – the same model for the Thames Tideway Tunnel and London Heathrow Terminal 5.
This lower cost financing method is expected to lead to savings of at least £30bn over the lifetime of the Suffolk power station compared to the existing contracts for difference scheme that has been used for funding Hinkley Point C, currently under construction in Somerset.
The government also plans to set up Great British Nuclear, an arms’ length body that will develop a pipeline of nuclear power plants, beyond Sizewell C.
Chancellor of the exchequer, Jeremy Hunt, said: “Today’s investment in Sizewell C represents the biggest step on our journey to energy independence – the first state backing for a nuclear project in over 30 years. Once complete, this mega project will power millions of homes with clean, affordable, home-grown energy for decades to come.
“Together with our drive to improve the nation’s energy efficiency, this package will help to permanently bring down energy bills and stop Britain being at the mercy of global gas prices beyond our control.”
EDF Energy chief executive, Simone Rossi, said: “This is a big vote of confidence in Sizewell C and we are very excited the government is partnering with us to prepare the project for further investment.
“Sizewell C will build on the achievements of Hinkley Point C and replicating its design will provide more certainty over schedule and costs. It will deliver another big boost to jobs and skills in the nuclear industry and provide huge new opportunities for communities in Suffolk.
“New nuclear will protect Britain from volatile global gas markets and help keep bills under control for the country’s homes and businesses.
“Greater energy efficiency will strengthen Britain’s energy independence and reduce household bills permanently, and we welcome government’s action. We are ready to step up our installation rates to help more households benefit from lower bills.”
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