Sizewell C ‘may cost double government estimates and take five years longer to build’ | Policy

The proposed Sizewell C nuclear power station could cost UK taxpayers more than double government estimates and take an additional five years to build, research shows.

Ministers will decide in July whether to approve the Suffolk power station development proposed by French developer EDF. The Business Department has estimated that the government-backed scheme will add an extra £1 a month to household bills to help with building costs.

But research from the University of Greenwich Business School seen by the Guardian shows the average monthly cost could be as high as £2.12, or £25.40 a year. At its costliest point, construction could cost taxpayers nearly £4 a month. This represents the grimmest forecast from the study, which predicts construction would take 17 years and cost £43.8billion.

The project was expected to cost £20 billion and take 10-12 years to build. Stephen Thomas, a professor at Greenwich Business School, said the average forecast put the cost at £35bn over 15 years, or £2.3bn a year.

The figures could further inflame the debate over the cost and time to build power stations after Boris Johnson last month set a target of building a new nuclear power station every year.

EDF admitted last week that Hinkley Point C, the power station it is developing in Somerset, would cost an additional £3bn, taking it up to £26bn. The already delayed project will take another year and is expected to start producing electricity in June 2027. EDF had originally planned to have it operational by Christmas 2017.

The French company said consumers would not be affected by the additional costs at Hinkley Point C, which will be borne by EDF and China’s CGN, its junior partner in the project.

However, at Sizewell C, the government has already committed £100m to the project and plans to use a Regulated Asset Base (RAB) funding model.

RAB financing offers investors a fixed return during the construction phase of a project, reducing their risk and making an asset more attractive to outside investors. However, it transfers the risk of delays and additional costs to taxpayers.

The government argues that the RAB model could reduce the cost of a nuclear power plant project by more than £30billion over its 60-year lifespan. The model was used in the construction of Heathrow’s Terminal 5 and the Thames Tideway super sewer.

A final decision on the plans for Sizewell C was recently pushed back from May 25 to July 8. The site is located north of the existing EDF Sizewell B power plant.

Activists argue that the development would be costly and threaten the local environment.

The prospect of additional costs comes as consumers face skyrocketing bills amid the energy crisis. The government has been asked to step in with annual bills set to soar to almost £3,000 from October.

Johnson has thrown his weight behind nuclear power as a green option to bolster Britain’s energy security following Russia’s invasion of Ukraine and as he targets net emissions zero by 2050.

Thomas said: “It may not seem like a huge extra amount on the bills, but many of these projects will overlap, which means consumers will be paying even more for a long time. If the costs are even higher than expected, it could become a real burden.

A spokesperson for Sizewell C said: “The RAB model is a proven financing arrangement, which has already been used to raise finance for over £160bn of UK infrastructure. Applied to Sizewell C, it will reduce the cost of financing and provide significant savings to consumers. »

A government spokesman said: ‘We strongly maintain our assessment that a large-scale project funded under our Nuclear Act would add at most a few pounds a year to typical household energy bills during the early stages. of construction, and on average about £1. one month throughout the construction phase of the project.

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