Final investment decision signed on Sizewell C with cost almost doubling to £38bn

The government has signed the final investment decision on the Sizewell C nuclear power plant with the cost of the scheme set at £38bn, almost double the £20bn previously forecast.

Energy secretary Ed Miliband has agreed a deal with a group of private investors which will see the government take a 44.9% stake in the Suffolk project as the largest equity shareholder.

Canadian investment group La Caisse will take 20% ownership, with British Gas owner Centrica taking 15%, French energy giant EDF taking 12.5% and UK investor Amber Infrastructure taking 7.6%.

The plant, which will use the same design as Hinkley Point C, is expected to be up and running by the mid to late 2030s and will supply energy to six million homes.

Despite the increase in cost compared to previous official estimates, the Department of Energy Security and Net Zero (DESNZ) said it would be built for around 20% less than the £46bn Hinkley Point C.

DESNZ said the investment deal on Sizewell C builds on lessons learned from the construction of Hinkley Point C with a funding model that spreads the cost between consumers, taxpayers and private investors.

It means the cost of building the plant will add around £1 a month to consumer energy bills for the duration of construction, which is expected to take at least a decade.

Miliband said it is “time to do big things and build big projects in this country again”.

“This government is making the investment needed to deliver a new golden age of nuclear, so we can end delays and free us from the ravages of the global fossil fuel markets to bring bills down for good,” he added.

The investment decision comes a month after the project announced a deal to build parts of the plant with Laing O’Rourke, Balfour Beatty and Bouygues Travaux Publics, which are currently building Hinkley Point C under an alliance agreement called the Civil Works Alliance (CWA).

The CWA will carry out enabling works and earthworks, marine and tunnelling works, main civils works and ancillary works including roads.

Laing O’Rourke’s chief executive Cathal O’Rourke said the firm welcomed the certainty the investment decision brings for Sizewell C, adding: “We’ve learned a lot from the work we’ve done on Hinkley Point C and that experience will power how we deliver this complex project.”

Balfour Beatty chief executive Leo Quinn added: “Sizewell C – and our role in it – will be central to successful delivery of Britain’s ambition to deliver clean and secure energy to UK homes and businesses. 

“With the final investment decision for Sizewell C confirmed, we look forward to works commencing in earnest, so that we can apply the innovative solutions and lessons learnt from Hinkley Point C, to lower carbon emissions, create thousands of jobs and apprenticeships, and deliver this nationally significant project safely, efficiently, and to the highest standard.”

Sizewell C has already signed £330m in contracts with local companies, with 70% of contracts predicted to go to 3,500 British suppliers.

The plant is part of the Department for Energy Security and Net Zero’s (DESNZ) strategy to generate 24GW of the UK’s power from nuclear sources by 2050.

When it comes online, the two-reactor scheme will generate a total 3.2GW of electricity, equivalent to 7% of the UK’s electricity.