New nuclear plant at Sizewell set for green light

The government is close to giving the green light to a new nuclear power station at Sizewell in Suffolk.

The BBC has learned that talks with the Sizewell contractor, EDF, have intensified in recent weeks.

This comes after the collapse of projects in Anglesey and Cumbria when Japanese firms Hitachi and Toshiba pulled out.

Government officials are insisting that it “remains committed to new nuclear”.

This commitment to new nuclear may be included as part of a 10-point government plan to be published in early November.

That plan is expected ahead of a detailed government white paper in late November which will attempt to set out the course of UK energy policy for decades to come.

Unions have warned that a failure to transfer jobs, skills and new opportunities from the current project under construction at Hinkley Point in Somerset to Sizewell in Suffolk would put thousands of high skilled jobs at risk.

The details of how new reactors at Sizewell will be paid for are still being hammered out.

The government is considering taking an ownership stake and consumers may see a small addition to their bills to pay for the project as it is being built, in order to drive down the costs of financing a project that may cost up to £20bn and take about 10 years to build.

The bigger the government stake, the smaller the call on consumers to “pay as you go” for the development and construction costs.

This funding model has been treated with suspicion before, as opponents say it transfers the risk of delays and budget overruns from the contractor to the consumer and the taxpayer.

However, the BBC understands that the fact Sizewell C is a carbon copy of Hinkley – which has seen work on a second reactor there completed 30% more quickly than the first – is thought to have substantially mitigated that risk.

One of the reasons that the electricity that Hinkley will one day produce is so expensive (£92.50 per megawatt hour, compared with gas and wind at about £40) is that the constructors were required to shoulder the risk of any cost overruns themselves. EDF estimates that the cost of electricity produced at Sizewell will be somewhere between £40 and £60.

The government hopes that the regular payments from both the government and consumers will encourage private sector investors like pension funds to also take an ownership stake in the project.

There are three reasons that Sizewell C will be approved:

1 – Government Policy

The government has recently confirmed that it “remains committed to new nuclear” as part of a mix of low-carbon electricity production. At the moment, Sizewell C is realistically the only horse in the race.

Of the original six sites earmarked a decade ago for a new fleet of nuclear reactors, three (Wylfa, Moorside and Oldbury) have collapsed, with only one already under construction at Hinkley Point in Somerset.

Plans for Small Modular Reactors (SMRs) have attracted interest and research investment from the government, but are thought to be many years from being a realistic alternative to big nuclear plants. Rolls Royce, which is spearheading this research and development, may disagree, but as one industry source put it, “I don’t think that anyone really thinks that SMRs are a thing just yet.”

That means Sizewell C is the only realistic option left on the table.

2 – Hitting net zero

Even some of the most prominent evangelists for renewables such as wind and solar privately admit that you can’t get to net zero by renewables alone without compromising the stability of the electricity grid.

There are times when the wind doesn’t blow and the sun doesn’t shine. It is possible to develop enhanced battery storage and use “smart grid” technology to flick between different renewable sources, but to do that would require billions of investment in a radical redesign of the national grid to provide that kind of flexibility and connectivity.

Nuclear currently supplies more than 20% of all UK electricity and although offshore wind can be expanded enormously, keeping pace with the soaring demand expected for electricity in our transport and heating systems would be asking too much of renewables.

We will need gigantic quantities of low-carbon electricity and when it’s built and running, that’s what nuclear gives you. The new plants at Hinkley and Sizewell alone are expected to supply 14% of the UK’s electricity needs.

3 – Jobs, jobs, jobs

A decision to green-light Sizewell will be welcomed by unions as an important move to preserve jobs and expertise in a high-skilled and well-paid sector.

The union Unite has called on the government to approve the plans, arguing that 10,000 jobs are “in the balance” if the project does not go ahead.

The government recognises this.

Energy industry sources agreed, telling the BBC that there is a “compelling industrial case” for the “lift and shift” of jobs and skills from the plant currently under construction at Hinkley Point in Somerset to Sizewell in Suffolk.

Contractors EDF claim Sizewell will create and support 70,000 direct and indirect jobs throughout the UK.