Boris Johnson greenlights funding for Sizewell C nuclear plant
Image credit: EDF
The Prime Minister's approval of a new multibillion-pound nuclear power station in the last few weeks of his premiership could "tie Liz Truss's hands" when it comes to addressing the cost-of-living crisis, a Treasury minister has warned.
Whitehall sources have confirmed the Prime Minister and Chancellor Nadhim Zahawi have given the go-ahead for the financing of the construction of the Sizewell C nuclear reactor in Suffolk.
The UK government is expected to buy a 20 per cent stake in the plant for £6bn and seek private funding to finance the remaining cost of the project, estimated at £20-30bn, although a final decision on the figures will be made early next year.
The project, mainly funded by the French energy company EDF, aims to generate about 7 per cent of the UK's electricity needs and operate for 60 years. The new plant would be built next to the existing Sizewell B, which is still generating electricity, and Sizewell A, which has been decommissioned, according to Business Secretary Kwasi Kwarteng. To date, the government has committed £100m to develop the project.
The recent announcement contradicts Boris Johnson's statements that he would not be making any major decisions until a new leader for the Conservative party is elected on 5 September.
Although Kwarteng - who is tipped to be Liz Truss’s chancellor if she wins the Tory leadership race - is said to be “massively” on board with the plan, other party members have expressed doubts about the rationale of Johnson's decision, as well as fears that it would limit the decisions of the next prime minister.
In a letter leaked to the Sunday Times, Simon Clarke, chief secretary to the Treasury, said the costs of Sizewell C are “sufficient to materially affect spending and fiscal choices for an incoming government, especially in the context of wider pressures on the public finances” and worried that Johnson's move would "tie the hands" of his successor.
Responding to Clarke's concerns, a government spokeswoman told the BBC: "Nuclear power has a key role to play as we work to reduce our reliance on fossil fuels and exposure to volatile global gas prices. Negotiations are still ongoing on Sizewell C and as these are active and commercially sensitive discussions we cannot comment further."
Faced with record-high inflation rates and rising energy prices, Truss, the frontrunner to become the next British prime minister, has pledged tax cuts, including a reversal of the National Insurance hike costing at least £30bn per year.
Truss has not yet stated a clear position on Sizewell C, but she has in the past year hinted at concerns about the involvement of China’s state-owned energy company, CGN, in the consortium that provided funding for the preparatory work at the nuclear plant.
“I think it’s very important that we don’t become strategically dependent and I think it’s important that we make sure that we’re working, particularly in areas of critical national infrastructure, with reliable partners,” she told The Telegraph at the time.
However, as experts warn the energy price cap could surpass £6,000 in April, Truss is under growing pressure to increase the UK's energy production capabilities, an objective that Kwarteng believes would be achieved by “cracking on" with more nuclear power stations.
The building of the new plant has however proved controversial amongst environmental campaigners, who said the project went against the recommendation of the Planning Inspectorate regarding the need to resolve issues on water supplies and nature. The plant would be built next to the RSPB’s Minsmere nature reserve, and could therefore have a negative effect on the avocets, bitterns, marsh harriers, otters and other species that live in the area.
“Whatever way you look at it, this is a very dodgy decision," said a representative of the Stop Sizewell C campaign group. "Has it been made by a lame duck PM who is not supposed to tie the hands of his successor, or was it in fact made before Sizewell C was granted planning consent, lending serious weight to our conviction that this was a prejudiced, political decision?
“Our next Prime Minister should call Sizewell C in: there are so many better ways to spend billions of pounds of taxpayers’ money than on a project that won’t light a single lightbulb for at least a decade.”
The UK government plans to completely decarbonise the country’s electricity by 2035. By 2050, it is expected that up to 25 per cent of the country’s energy usage (24GW) would be generated from nuclear, while the remaining 75 per cent would come from other forms of renewable or low-carbon energy such as offshore wind or solar.
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