Article by Oliver Wright, courtesy of The Australian
10.06.2025
Britain’s Labour government has agreed to take a £17.8bn ($36.9bn) stake in building a nuclear power plant as fears rise that the country’s rush to build wind and solar farms is leaving the grid vulnerable to outages.
Under plans announced by Rachel Reeves, the chancellor, the government will increase its investment in the Sizewell C nuclear power plant in Suffolk by £14.2bn over the next three years on top of £3.6bn of public money committed under the Conservatives. Further funding will come from French energy group EDF, which is building the plant, as well as private infrastructure investors.
The government said the reactors would be able to provide six million homes with electricity, regardless of low winds and dark winter days.
An over-reliance on intermittent renewables has been blamed for blackouts that hit Spain in April. Nuclear generation is a reliable source of baseload power, the minimum amount of demand on the grid.
Ed Miliband, the energy secretary, said the announcement heralded a “golden age” for the UK nuclear industry and was part of efforts to switch to clean power sources and boost energy security by reducing reliance on fossil fuels from Russia.
“This challenge of energy security and the demands of the climate crisis mean that it is in our interests to shift as fast as possible to clean, homegrown power,” Mr Miliband told the Telegraph.
“The demand for that power is expected to at least double by 2050. That’s why we need all the clean, homegrown sources that we can to meet the demands we face. New nuclear is a crucial source of firm, baseload power.”
Government sources said ministers decided to take a larger stake in the plant because they were confident it would provide a significant return to the taxpayer. Under the funding model, investors carry all the risk of cost overruns, but are paid back through consumer bills and can make more money if the project comes in on time and on budget.
The new money will be seen as a win for Mr Miliband, who fought with the Treasury for significant capital investment in the government’s clean energy goal.
A plant with the same design being built by EDF at Hinkley Point has run billions of pounds over budget and is not expected to open before the early 2030s, more than five years late.
The company said it had learnt lessons from Hinkley, in Somerset, and could build Sizewell C faster and more cheaply.
However, it is still likely to cost much more than the estimated £20bn in 2020, and will not produce power for at least another decade. The total cost will be set out this summer when external private investors are announced.
Ultimately, the project will be paid for via consumers’ electricity bills, adding about £1 a month to the cost of power over the 60-year lifespan of the plant.
The announcement is among investments in nuclear made as part of the government’s pledge to decarbonise electricity supplies and cope with growing demand. Ministers also set out proposals to kickstart a generation of small modular reactors that supporters claim can be built faster and more cheaply than traditional plants. The government backed a design developed by Rolls-Royce which will receive £2.5bn of government money over the next three years to commercialise the project. It comes despite government concerns about the financial and political cost of net zero as both the Tories and Reform pledge to rethink the UK’s climate pledges.
Mr Miliband said that it showed the government would “not accept the status quo of failing to invest in the future and energy insecurity for our country”, adding: “We need new nuclear to deliver a golden age of clean energy abundance. That is the only way to protect family finances, take back control of our energy and tackle the climate crisis”.
The Times
