Sizewell C delivery model could cut costs but is risky for consumers and taxpayers, says NAO

The novel delivery model chosen for Sizewell C in an aim to reduce costs and keep the job on track places more risk on taxpayers and consumers than similar schemes, according to the National Audit Office (NAO).

In its report on the Department for Energy Security and Net Zero’s (DESNZ) delivery model for the £38bn nuclear power project, the NAO warned of “big assumptions” underlying the extolled benefits of the model.

DESNZ announced in 2025 that it had secured private investment from EDF and others. But while the British state will provide most of the finance for the scheme, it owns only a minority share of the company delivering it, intentionally limiting its control in order to avoid the governance weaknesses that have dogged previous megaprojects.

The current equity share for the scheme gives DESNZ a 45% stake, with 12.5% for EDF, 20% for La Caisse, 15% for Centrica and 7.6% for Amber Infrastructure.

DESNZ’s modelling assumes that if the project was fully under public control, costs would rise to £47.7bn, its higher regulatory threshold. The financial returns to investors will cost consumers between £4bn and £4.5bn, unless they also help to cut costs and decrease delivery time.

Investor returns will reduce by up to 1.6% for any overruns below the higher regulatory thresholds. However, if costs rise to just below this amount, they will still earn returns comparable with other utilities.

The department expects Sizewell C to increase energy prices for the typical household by £4 in 2025/26, rising to at least £17 by the time it opens in more than a decade’s time.

By its completion, DESNZ predicts the scheme’s net benefit to consumers could be up to £18bn, but that these will not outweigh its costs until after 2060 and that they are “subject to significant uncertainty”.

DESNZ assumes that if the project was fully under public control the construction costs would rise to the ‘higher regulatory threshold’ set out in the economic licence of £47.7 billion,4 and that the involvement of private investors is justified, as their expertise will reduce construction costs and speed up delivery.

The UK’s other nuclear project, Hinkley Point C, is currently expected to cost double initial projections and has experienced a seven-year delay.

While DESNZ hopes that lessons learnt from that scheme will see Sizewell C cost less to build, it is likely that consumers will pay more for energy from the project because the price of Hinkley’s electricity was set before its cost overran, which has been borne by EDF.

“Sizewell C forms a significant part of the government’s plan for a secure and affordable clean energy supply,” said Gareth Davies, head of the NAO.

“There has been a concerted attempt to learn from the problems of previous nuclear power construction projects and other large infrastructure schemes. 

“This has resulted in a novel financing structure and DESNZ will need to monitor the risks to taxpayers and billpayers closely.”

Upon its completion, Sizewell C could power the equivalent of six million UK homes for 60 years.