National Audit Office Highlights Uncertainty Over Sizewell C Costs and Benefits
The National Audit Office (NAO), the UK government’s spending watchdog, has raised concerns about the £38 billion cost of the Sizewell C nuclear power plant in Suffolk, warning that there is "significant uncertainty" surrounding the project’s expenses and that the benefits may not outweigh the costs for UK households until at least 2064.
While the NAO acknowledges that the potential benefits of Sizewell C are considerable, it emphasizes that these benefits remain uncertain. In contrast, the risks associated with the project are described as "immediate, substantial and borne by the public."
The government asserts that the nuclear reactor, which is expected to begin operations in the late 2030s, will generate enough low-carbon electricity to power approximately 6 million homes. It claims this could save £2 billion annually for the electricity system compared with alternative low-carbon technologies.
However, the NAO cautions that for households, the overall savings could be outweighed by the costs of supporting the plant’s construction for nearly half of its 60-year operational lifespan. The break-even point could be delayed further if there are cost overruns or project delays.
Concerns Over Project Scale and Risks
"Sizewell C is a project of exceptional scale, complexity and significance for taxpayers,"said Sir Geoffrey Clifton-Brown, chair of the public accounts committee, which oversees the NAO’s work.
"Experience from comparable nuclear projects in the UK and overseas highlights their vulnerability to delays and cost overruns."
Sizewell C is being developed by the French state nuclear company EDF as a successor to the Hinkley Point C reactor in Somerset, the first nuclear plant constructed in the UK in a decade. EDF has invested £1.1 billion in the project alongside the UK government.
Other stakeholders include British Gas’s parent company, Centrica, which owns 15% of Sizewell C, the Canadian pension fund La Caisse with 20%, and the investment fund Amber holding 7.6%.
Project Leadership and Economic Impact
Nigel Cann, chief executive of Sizewell C, described the costs to household energy bills as an "investment in lower long-term electricity costs" that will
"deliver value to consumers and to the country for the rest of this century."
Cann also highlighted the project’s contribution to the UK economy through job creation and business opportunities nationwide. Sizewell C has reportedly fulfilled its commitment to source 70% of its construction value from UK suppliers and has spent just under £5 billion to date.
"All major infrastructure projects involve uncertainty, and the report highlights the steps we’re taking to reduce risk and control costs,"Cann added.
Government Position and Funding Model
A government spokesperson stated that investing in large-scale nuclear power is the "only way to get our country off the rollercoaster of volatile global gas markets."
Households began contributing to Sizewell C’s funding through their energy bills at the start of the year to support construction. This financing approach, known as a regulated asset base (RAB) model, differs significantly from the Hinkley Point C arrangement, where guaranteed revenues from energy bills commence only once the plant starts generating electricity in the early 2030s.
Criticism and Risk Mitigation
Critics of the RAB model, including the campaign group Stop Sizewell C, warn that construction delays could result in consumers funding the project for longer periods without receiving power, while the government assumes the financial risks.
Stop Sizewell C stated that the risks could
"easily turn Sizewell C into a financial disaster,"and that the funding model means
"its investors were the only ones who can’t lose."
The NAO has urged the government to mitigate these risks through
"close monitoring, greater transparency to parliament, and by securing value for money from the significant public and private investment."
