Sizewell C set back after investor pulls out
06:00 05 February 2013
A multi-billion pound project to deliver a new nuclear power station and thousands of jobs to Suffolk hit a set back yesterday after a major investor walked away from the deal.
The Sizewell story so far...
EDF revealed its plans to build a new nuclear power station at Sizewell C in November, as part of project believed to cost in the region of £10bn.
The announcement was set to pave the way for a jobs bonanza in Norfolk and Suffolk – with the aim of employing 25,000 people over nine years and generating enough electricity to power five million homes.
Business leaders used the occasion to make a clarion call to firms across the east to seize “one of the biggest opportunities” of the next decade, as it was predicated the project would be worth as much as £100m a year to the local economy during construction – and a further £40m a year once complete.
However, campaigners mounted a strong warning against the potential dangers of the project amid claims that nuclear energy was proven to be unsafe and would lead to damage to a swathe of the Suffolk countryside.
The proposals, released by EDF, showed that the multi-billion pound build would include: Two new UK EPR reactors at Sizewell C next door to Sizewell B; Possible sites for a new visitors’ centre; Possible sites for a temporary campus to house about 3,000 workers; Park and ride facilities for workers who commute; An upgrade of the rail network near Sizewell so it could be used for freight delivery during construction; A jetty for sea delivery during the construction of the power station; A lorry park with 50 to 100 parking spaces; Road improvements, with the possibility of a bypass of part of the A12.
The creation of the Sizewell C power station would come as the latest stage in the 50-year history of the Suffolk coastal site.
The original Sizewell Nuclear Power Station, now called Sizewell A, was built in the early 1960s and began operating in 1966.
It was decommissioned in 2006, being replaced by Sizewell B.
The replacement power station took seven years to build from 1988 to 1995 and first synchronised with the National Grid on February 14 1995.
Capable of supplying more than 2.5m homes with energy – equivalent to the daily domestic needs of Norfolk and Suffolk – it is set to be decommissioned in 2035.
The Sizewell site has been the focus of a number of protests over the years including members of the Stop Nuclear Power Network UK group wearing fish masks in February 2011.
In January 2003, determined protesters from Greenpeace successfully breached security at the site for the second time in four months. They made it on to the roof and past an inner security barrier to show what they felt were weaknesses in security.
British Gas owner Centrica pulled out of the UK’s new nuclear build programme leaving a financial hole – believed to be up to £2billion – in EDF Energy’s ambition to build a third nuclear facility at Sizewell.
In a statement, it cited its “uncertainty about overall project costs and the construction schedule” for new nuclear build sites at Hinkley Point in Somerset and Sizewell near Leiston.
But yesterday EDF Energy insisted that the Sizewell project, which reaches the end of the first stage of its public consultation tomorrow, is “advancing well”.
It comes just two months since EDF announced its far-reaching plans for the new power station that aimed to employ 25,000 people over nine years and be worth as much as £100m a year to the local economy during construction – and a further £40m a year thereafter.
Last night South Suffolk MP Tim Yeo, who is chairman of the Energy and Climate Change Committee, said the news was a “step in the wrong direction” for Sizewell, and urged the government to conclude its negotiations with EDF regarding the “Contract for Difference” – low carbon subsidy agreement, which provides financial security to would-be investors.
Sam Laidlaw, chief executive of Centrica, which will write off its 20pc share of the pre-development expenditure - around £200 million - as an exceptional cost in the group’s 2012 results, said: “It is clear that both construction costs and timeline for build have increased significantly.
“There has been good progress on the ground but we remain uncertain about overall construction costs and timeline.”
Meanwhile, EDF said it respected Centrica’s decision. “EDF Energy was prepared for this decision and understands that the profile and scale of this investment may not meet Centrica’s shareholders’ current expectations and priorities,” a spokesperson said.
“EDF Energy values the expertise Centrica has brought to the new nuclear project and the continuing partnership between the two companies in its existing nuclear business.”
A spokeswoman added: “Our ambition and commitment to developing new nuclear at Sizewell remain unchanged and we look forward to reviewing the important feedback we are receiving from the stage 1 consultation which concludes this week.”
“We have said for some time that we were open to the idea of other investment partners and as we approach our final investment decision, it is right to consider funding options.
“The project is advancing well and has achieved a level of maturity to make it attractive to potential new investors. However, it is too early to say anything about the outcome.”
Anti-nuclear campaigners Friends of the Earth claimed the blow had seen the Sizewell project become an “economic nightmare”.
But Mr Yeo said the decision was not completely unexpected.
He said: “It clearly is a setback. It’s not completely unexpected. But nevertheless, I’m disappointed.
“I think it’s clear the government needs to try to conclude its negotiations with EDF regarding the ‘Contract for Difference’.
“We are negotiating that at the moment. It’s obviously been a difficult negotiation,” he said. “From our point of view, the sooner that negotiation is concluded, the better.”
He added: “I’m a great supporter of Sizewell C and this is undoubtedly a step in the wrong direction.”
A Department of Energy and Climate Change spokesman said: “The decision by Centrica reflects the company’s investment priorities and is not a reflection on UK Government policy. The recent purchase of Horizon Nuclear Power by Hitachi is clear evidence of the attractiveness of the new nuclear market in the UK.”