The construction of the Sizewell C nuclear power station could add up to £19 a year to household electricity bills by the time it becomes operational, according to the National Audit Office (NAO). The government reached an agreement with investors last year to proceed with the plant, which is estimated to cost around £38 billion.
Project Timeline and Impact
Construction is expected to be completed by summer 2039, and the plant will provide power equivalent to the needs of six million UK homes for 60 years. The NAO report, published on Wednesday, indicates that the cost of Sizewell C will increase electricity prices for a typical household by £4 in 2025-26, rising to between £17 and £19 by the time the plant opens.
Finance Structure and Stakeholders
The NAO highlighted the "novel finance structure" used by the Department for Energy Security and Net Zero (DESNZ), supported by industry investors. The government holds the largest stake at 44.9%, with other investors including Canadian investment fund La Caisse (20%), British Gas owner Centrica (15%), EDF (12.5%), and Amber Infrastructure (initial 7.6%).
The report notes that financial returns to investors could cost consumers between £4 billion and £4.5 billion, unless they contribute to cost reductions and shorter project timelines. However, government modelling suggests the project could provide up to £18 billion in net benefits for consumers.
Government Response
A DESNZ spokeswoman stated: "Building new nuclear is an investment this country must make, because it is the only way to get our country off the rollercoaster of volatile global gas markets. As the NAO confirms, this is a good deal for consumers and taxpayers – leading to cheaper power for families, saving £2 billion a year across the energy system once built, and limiting the impact on a typical household bill to an average of around £1 per month during construction."
Gareth Davies, head of the NAO, commented: "Sizewell C forms a significant part of the government's plan for a secure and affordable clean energy supply. 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."
