French energy group EDF Energy has lined up “about a dozen” potential investors for a new nuclear plant being planned for Suffolk.
The firm, which estimates that Sizewell C will be 20% cheaper than the £19bn price tag attached to Hinkley Point C in Somerset, said investors across a wide spectrum, including pension funds, were showing an interest in the Suffolk project.
It is now in talks with the dozen private investors about backing the construction of the plant, which should be cheaper, as copying an existing design, such as Hinkley Point C, will cut costs.
Humphrey Cadoux-Hudson, managing director of nuclear development at EDF’s UK arm, is optimistic a deal can be struck with private investors, which could serve as a model for other UK nuclear projects.
EDF and its Chinese partner CGN would take minority stakes in Sizewell, but the project will need “a strong UK shareholder base”, he said.
A key selling point for Sizewell is that the plant will be a copy of Hinkley Point C, which should mean construction costs come in lower.
Business secretary Greg Clark said early this month that although it would consider taking an equity stake in a proposed nuclear plant at Wylfa, on Anglesey in north Wales, its long term objective was for other nuclear power plants to be paid for by the private sector.
Government would review the viability of a financing model for private investors whereby they would secure a return on their regulated asset base (RAB), he said.
“If we can make Sizewell C a straight copy of Hinkley Point, and stabilise the design, then we can reduce the construction cost by around 20%,” said Mr Cadoux-Hudson. The RAB model could be one way of financing Sizewell, he added.
French state-controlled EDF and its Chinese partner CGN will bear the upfront construction costs of about £19.6bn for the Hinkley Point C project in Somerset, but the UK government has guaranteed the French group a minimum price of £92.50 per megawatt
hour for the plant’s electricity, rising with inflation for 35 years - about twice the current wholesale price.
On Thursday, June 28, the government is expected publish a “sector deal” for the nuclear industry, in which it focuses on how to drive down the costs.
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