Boris Johnson has approved the start of negotiations with EDF about funding a new £20 billion nuclear power plant despite concerns that taxpayers would foot the bill for any extra costs.
As might be expected, “New Anglian” LEP follows Heart of the South West (HotSW) in welcoming this “boost” to the local economy. But Owl detects a more measured tone, none of the “Golden Opportunity” hype of HotSW – see below
[French auditors report on EDF to follow in separate post, essential reading for those footing the bill. ]
Steven Swinford | Emily Gosden, Energy Editor www.thetimes.co.uk
The government is considering backing Sizewell C, a twin-reactor plant in Suffolk. It could generate 3.2 gigawatts of electricity, enough to provide 7 per cent of Britain’s energy needs.
The move is a vital part of the prime minister’s pledge to reach net-zero emissions by 2050. Most reactors are due to shut down this decade, leading to fears of blackouts in the 2030s.
China General Nuclear Power (CGN), a Chinese state company, has a 20 per cent stake in Sizewell C but is thought to be planning to pull out, increasing the need for new investors. The government is considering taking an equity stake in the plant amid concerns that private investment could still leave it with multibillion-pound liabilities. Taking an equity stake would allow taxpayers to benefit from any profits.
Sizewell C is now the only project in contention for government investment. The government offered to take a one-third stake in Hitachi’s Wylfa plant on Anglesey, but the Japanese company cancelled it in September.
Sizewell would be a sister project to Hinkley Point C, which EDF, the French energy company, is building in Somerset with CGN. Costs there have risen to £22.5 billion. Alison Downes, of the Stop Sizewell C campaign group, has said previously: “Sizewell C is a bad project — if EDF can’t make it work on their own terms they shouldn’t expect the British public to bail them out.”
Tom Greatrex, of the Nuclear Industry Association, said: “Any credible analysis of reaching net-zero shows you need lots of zero-carbon, including that which is not reliant on the weather.
“Nuclear construction isn’t expensive — financing nuclear projects is. Using a better model than at Hinkley would significantly reduce the cost for consumers.”
The announcement of talks with EDF comes as the government publishes its energy white paper, which includes plans to switch consumers to cheaper tariffs automatically.
Alok Sharma, the business secretary, will publish proposals today to end the “loyalty penalty”, which according to Look After My Bills, a price comparison website, costs loyal customers an average of £169 more a year. Under one plan to be tested, called “opt-in switching”, consumers will be offered a simple method to switch if their initial contract has ended. “Opt-out switching” will involve consumers being automatically moved to a more competitive rate.
Mr Sharma said the decision to enter talks did not amount to a “green light” for construction to begin. “We are starting negotiations with EDF, which would be the developer at Sizewell C,” he told BBC Radio 4’s Today programme.
“What this is not is a green light on the construction, so what we will be doing is looking to see whether we can reach an investment decision in this parliament on that particular project. We will only do so if this delivers value for money for taxpayers and consumers.”
New Anglia LEP welcomes submission of application for Sizewell C
EDF Energy submitted its Development Consent Order application for Sizewell C, a new nuclear power station in Suffolk, on 27 May 2020.
The construction of a new nuclear power station on the Suffolk coast would create 25,000 employment opportunities and 1,000 apprenticeships, as well as bringing a huge economic boost to the local area.
New Anglia LEP Chief Executive Chris Starkie said: “We welcome the decision by EDF Energy to submit its planning application.
“The planning process will now give EDF Energy the opportunity to make its case for the project and for supporters and objectors to be heard.
“New Anglia LEP is keen to see the project proceed with the maximum benefits for local businesses and workers and to cause the minimum disruption for residents and the tourism sector. We believe this can be achieved if EDF Energy responds positively to the concerns of local residents.
“We are also calling on EDF Energy to set an ambitious target for the value of contracts of £2bn awarded to businesses from Suffolk and Norfolk.”