MPs Call Sizewell C Funding Plan a "Terrible Deal" for Taxpayers

The government's plan to fund the Sizewell C nuclear plant in Suffolk is a "terrible deal" for the UK taxpayer, according to MPs on the public accounts committee (PAC). The committee says the cost of the project could climb to almost £48bn.

Under the committee's reading, bill payers could be asked for an extra £9.8bn to build the plant before 2040. A further £12bn could follow over its 60-year operating life. The PAC says taxpayers and consumers face a "high level of risk".

Who owns what

The government holds 44.9% of the plant. French state developer EDF has 12.5%. Centrica, owner of British Gas, holds 15%. The Canadian investor La Caisse has 20%, and the investment manager Amber Infrastructure has 7.6%.

The state took a bigger share than expected after buying out Chinese state nuclear developer CGN. CGN had been allowed a 20% stake before national security concerns emerged. The deal is paid for through taxes and energy bills. Sizewell C is seen as a successor to the long-delayed Hinkley Point C plant in Somerset.

The watchdog pointed to an imbalance. If costs overrun, the public could carry multibillion-pound bills, while private investors would need to put in only an extra £30m.

Sir Geoffrey Clifton-Brown, the PAC chair, said: "The high level of risk borne by taxpayers and consumers for the construction of Sizewell C is extraordinary. Private investors look set for significant returns on their investments, while customers are likely to be saddled with higher energy bills." He urged the government to focus on delivering the project and on rebuilding confidence in the UK's nuclear industry, so that taxpayers are "never put in this position again".

Government and industry respond

A government spokesperson said the report "completely ignores that investors are incentivised to complete construction as cheaply and quickly as possible" under the terms of the deal. Once running, the spokesperson said, Sizewell C could save £2bn a year across the energy system. They added that more than 2,000 workers are already on site.

The government expects the plant to cost between £40.5bn and £47.7bn, with construction finishing between 2039 and 2043. The committee wants the scenario analysis behind those estimates within three months. It also asked ministers for a progress update every six months.

Critics of the project include Alison Downes of the Stop Sizewell C campaign group and Prof Steve Thomas of Greenwich Business School. They gave joint evidence to the committee. In their view, abandoning the project now could cost less than paying inflated energy bills over 60 years "multiple times over". They want the government to rule out using this funding model for future nuclear projects. Their joint statement said: "All it offers is a free ride for investors and financial pain for households."

Tom Greatrex, chief executive of the Nuclear Industry Association, took the opposite view. He said Sizewell C would provide "clean, reliable and constantly available power". It could save households billions in the cost of balancing the grid or building extra network connections. "Currently, the consumer is footing a bill of £2.8bn so far this year to manage a dysfunctional grid," he said, citing payments for wind to stop generating at some times and for gas-powered backup at others.

Source: The Guardian