EDF to invest £1.1bn in Sizewell C – but reduces overall stake in project

EDF

ENERGY giant EDF has said it intends to invest £1.1bn (US$1.5bn) in construction of the Sizewell C nuclear reactors on the Suffolk coast, UK, following government go-ahead for the project in June.

EDF’s announcement, subject to a final investment decision in the coming weeks, would see the French state-owned company’s overall stake in the project decrease to 12.5% from their previous shareholding of 16.2%.

Sizewell C was effectively given the go-ahead in June after the government committed £11.5bn for construction of two nuclear reactors, taking the total value of state support up to £14.2bn over the next four years.

EDF’s stake in the Sizewell C project has gradually reduced over the last 12 months. Until the start of this year the company owned 16.2%, the remainder owned by the UK government. Until 2024 EDF held a 49.4% stake in the project. Until the announcement it had been uncertain whether EDF intended to retain a long-term stake in the project.

Separately, the Financial Times reported this week that Canadian investment fund Brookfield Asset Management is planning on becoming the largest private investor in Sizewell C by acquiring a 20% stake. This has not been confirmed by either Brookfield or the government. Meanwhile, British Gas owner Centrica is reportedly planning to acquire a 15% stake, while the government intends to retain its majority shareholding.

Simon Rossi, CEO of EDF UK, said his company’s announcement was a “sign of its commitment to investing in Britain’s energy security and economic growth”.

He continued: “EDF is proud to have restarted new nuclear in the UK, with Hinkley Point C paving the way for Sizewell C and constituting significant ongoing investment.”

EDF’s announcement was made during French president Emmanuel Macron’s state visit to the UK. The French company has also signed a 15-year deal with British company Urenco who will produce fuel for EDF’s nuclear power stations across Europe.

UK energy secretary Ed Miliband said: “This agreement is a landmark moment in the UK and France’s longstanding partnership in civil nuclear, and a testament to our countries’ strong relationship.”

Splitting opinions

The new reactors at Sizewell C will be replicas of the two water-cooled pressurised reactors under construction at EDF-owned Hinkley Point C in Somerset, UK, the first of which was installed in December. EDF has been criticised for its management of Hinkley Point C which has seen multiple delays and cost overrun predictions. For Sizewell C, the government has said it will “remain a significant shareholder in the project – ensuring we have oversight of the progress and limiting delays”.

When the government announced the additional funding for Sizewell in June, Miliband said he was confident the reactors could be built “cheaper and faster” than Hinkley Point C, arguing that using the same design would help reduce costs and build time. However, Sarah Darby, a research fellow at the University of Oxford’s Environmental Change Institute, described Miliband’s logic as “weak”. She said that Hinkley Point C used the same European Pressurized Reactor (EPR) technology as the Olkiluoto 3 reactor in Finland and the Flamanville 3 reactor in France, but this did not stop the predicted cost more than doubling.

The government expects Sizewell C to take around a decade to build, which Darby says is “wildly optimistic”. The Financial Times, meanwhile, reported that insiders estimate the total cost of Sizewell C could reach £40bn – double the figure the government and EDF estimated in 2020. The government has rejected this figure. Darby added: “Where cost and complexity are concerned, there is the additional concern about the [Sizewell C] site being on a flood-prone and eroding coastline, with sea levels on the rise”.  

Hinkley Point C delays have fuelled concerns of a future energy deficit in the UK. The government looked to allay these concerns last December by granting runtime extensions to four EDF-operated UK reactors.