Ed Miliband’s Sizewell C nuclear power station cost ‘could hit £100bn’

Sizewell C’s cost could reportedly hit up to £100billion once financing is factored in. The Government said construction of the nuclear power plant in Suffolk will cost around £38bn when it announced a deal had been struck with a group of investors last week.

Under the deal, investors would be rewarded if the scheme’s construction costs falls under £40bn. They would not be obliged to contribute further funding if costs exceed £47.7bn.

But modelling prepared as part of the fundraising process reportedly gives a range of some £80bn to £100bn in nominal terms over the construction phase under both the above scenarios, according to the Financial Times.

Analysis by the same publication suggests the scheme’s cost would be £65bn to £80bn in real terms, subject to inflation. The modelling reportedly shows revenue from a surcharge on consumer bills to help pay for the power plant is expected to be between £30bn to £50bn.

An average of £1 will be added to household energy bills per month from autumn for the duration of the construction phase. Hailing the deal previously, Energy Secretary Ed Miliband said it was time for the UK to build big projects again.

Once Sizewell C is up and running, it is expected to generate annual savings of up to £2bn across the future low-carbon electricity system.

Sizewell C will power the equivalent of six million homes and create some 10,000 jobs once it is operational, which is expected to be in the 2030s.

Investors include the Canadian investment fund, La Caisse, with a 20% stake, British Gas owner Centrica with 15% and Amber Infrastructure with an initial 7.6%.

French energy giant EDF announcing is taking a 12.5% stake – lower than its previously stated 16.2% ownership. The Government will be the biggest equity shareholder in the scheme with a 44.9% stake.

It will supply £36.55bn in debt to be raised on the gilt market by the National Wealth Fund. Another £3.8bn will be raised in equity.

The Department for Energy Security and Net Zero said Sizewell C will deliver cheaper clean electricity for generations for at least six decades.

Its spokesperson said: “Analysis shows the project could save £2bn a year across the future low-carbon electricity system once operational.

“The £38bn cost of constructing Sizewell C will be spread between consumers, taxpayers and private investors and represents a saving of around 20% compared with Hinkley Point C.”

Hinkley Point C nuclear power station is under construction in Somerset and projected to open in 2031. That scheme has seen cost overruns and delays.