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The final price tag to build the planned Sizewell C nuclear power station in Suffolk is likely to be nearly £40bn, according to people close to negotiations over the major energy scheme.
The amount is double the £20 billion estimate given by developer EDF and the UK Government for the project in 2020, reflecting higher construction costs as well as the effects of delays and cost overruns at sister site Hinkley Point C.
This higher estimate is likely to raise questions about the government's strategy to revive nuclear power, at a time when government finances are under pressure and concerns about the cost of living.
EDF says that once the Sizewell C project is operational, it should be able to provide low-carbon electricity to the equivalent of about 6 million homes for 60 years.
The Treasury is set to decide whether to go ahead with the project in a multi-year spending review this year, according to officials.
The UK government and French energy group EDF were initial backers of Sizewell C, but are trying to raise billions of pounds from new investors, a process taking longer than planned.
Earlier this month, the Department for Energy Security and Net Zero (Desnz) said it could not disclose current cost estimates for the project because they were “commercially sensitive”.
But a senior government figure and two industry sources said a reasonable assumption for the cost of building Sizewell Sea would be around £40bn at 2025 prices.
The government has already awarded £3.7 billion in state funding for the project. Ministers had intended to reach a final investment decision by the end of 2024, but were forced to postpone this until the spring of 2025. Now there is speculation in the industry that any deal may be delayed until after the autumn.
Potential investors in Sizewell Sea include Centrica, Schroders Greencoat, Emirates Nuclear Energy Corporation and Amber Infrastructure Group.
According to accounts published in Companies House last week, Sizewell C “continues to make good progress in negotiations with private investors”.
Alison Downs, executive director of campaign group Stop Sizewell C, urged the government to “reveal” the “huge true cost” of the project given that households would pay up front for its construction through a levy on their energy bills. “This secrecy around Sizewell Sea is unforgivable.”
Dale Vince, a major Labor donor and founder of green energy company Ecotricity, has written to the government's new Office of Value for Money warning that building Sizewell “will saddle consumers with higher bills long before a single unit of electricity is delivered”. .
“Nuclear power is too expensive, too slow – and too expensive to be contained at the end of its life,” he told the Financial Times.
Nuclear power currently provides around 14 per cent of the UK's electricity, and many experts say it will be necessary to push to reduce carbon dioxide emissions to net zero by 2050.
However, all but one of Britain's current fleet of aging plants are due to close by March 2030, possibly sooner if planned life extensions do not go ahead.
Only one new nuclear power station, Hinkley Point C in Somerset, is currently being built in the UK but has been delayed and over budget.
The project is scheduled to begin production in 2029 at the earliest, at a cost of up to 46 billion pounds sterling. This compares to initial predictions for 2016 that it would start at the end of 2025 and cost £18 billion.
Sizewell C uses the same European pressurized water technology as Hinkley Point C. EDF said Sizewell C should be much cheaper partly because lessons will be learned and supply chains will be more sophisticated.
It is also built using a different financial structure, the structured asset base model, which is used in the water sector including project financing. The new Thames Tideway sewer tunnel. Developers start getting paid during construction from consumers' bills, rather than having to wait until the plant is finished.
But there are doubts within the government about how low the price of Sizewell Sea is compared to the price of Hinkley Point Sea.
Progress on the project has been partially stalled by the recent resignation of Rob Holden as Chairman of Sizewell C Limited for health reasons.
A spokesman for Dessens said he did not acknowledge the “speculative” £40bn figure for the cost of Sizewell Sea.
“The project is expected to reduce the cost of the electricity system, enhance our secure domestic energy supply and generate significant investment nationwide.”
