July 20, 2022 Peter Reina KEYWORDS Electricite de France / nuclear construction / Sizemore C Order Reprints No Comments

The U.K. government on July 20 gave planning approval for the 3,340-MW Sizewell C nuclear power plant proposed by the French state-controlled energy company Electricité de France on England's east coast.

EdF forecasts 10 to12 years of construction and project cost to be below the roughly $30 billion projected for Hinkley Point C, EdF's twin plant that now is under construction in west England. That project is running 18 months late, largely because of pandemic delays, according to EdF.

EdF expects to make a final investment decision on Sizewell C next year following negotiations with the government and further approvals by the Office for Nuclear Regulation and the Environment Agency.

Financing of Sizewell C would adopt the regulated asset base (RAB) method used in the UK water and electricity industries, as opposed to the project finance approach adopted for EdF's twin plant, Hinkley Point C, now under construction in west England. Rather than recouping the financing through a long term contract for differences after completion, the Sizewell developer would charge customers from the very start.

RAB funding "means that, by paying a small amount during construction, consumers will benefit in the long-term," says Julia Pyke, Sizewell C’s financing director. “Energy costs will be lower with nuclear in the mix, so today’s decision is good news for bill-payers." 

These benefits are unlikely to be realized for at least a decade until generation starts. Additionally, customers would share the risk of delays or cost overruns with the project owner. 

The charge "would add a nuclear 'tax' to all energy bills, regardless of whether customers have chosen a renewable tariff or a regular tariff," according to the Stop Sizewell campaign. 

Sizewell's project owner, NNB Generation Co. (SZC) Ltd., is 80% owned, via a holding company, by an EdF subsidiary with China's General Nuclear International Ltd. holding the balance.

EdF is looking for co-investors to join the team, while the continuing role of the Chinese company appears uncertain.