British Gas owner Centrica signals it will throw its financial might behind Sizewell C nuclear plant in Suffolk, bringing significant boost to project
British Gas owner Centrica has signalled it will throw its financial might behind the Sizewell C nuclear plant in Suffolk, bringing a significant boost to the project.
The utility giant will join French rival EDF as a significant backer of the plant alongside the British Government.
The Prime Minister wants Sizewell C to be one of up to eight new reactors built by 2030.
Planning ahead: Centrica will join French rival EDF as a significant backer of the Sizewell C plant alongside the British Government
It is a core part of his energy security strategy launched in April after Russia’s invasion of Ukraine.
Centrica’s commitment will help smooth a path towards a restructuring of the £20billion joint venture and the removal of Chinese state-backed CGN as an investor.
A new ownership structure is being drawn up by Ministers that will see EDF’s stake reduced from 80 to 20 per cent. The Government will take a 20 per cent stake under the new plan. Advisers at Barclays have been drafted in to find investors to cover the remainder. The Mail on Sunday understands Centrica – which has not yet put the decision before its company board – is prepared to take a stake.
But this will be lower than Centrica’s existing 20 per cent shareholding of Britain’s operational nuclear power stations, reflecting its reduced role in Britain’s energy provision compared with the past.
It also shows the group’s renewed commitment to nuclear energy after announcing it would sell off its interests just four years ago. It reversed that decision last year and now believes that nuclear will play a vital role in the country’s future energy provision, sources said.
Its support will be welcomed by Ministers keen to strengthen Britain’s domestic energy supplies as gas prices soar. It will also be seen as a tacit approval of the Government’s regulated asset base – or RAB – funding model, which has been used to fund other big infrastructure projects, such as gas networks and airports. This works by charging bill payers early on, helping to pay for large initial costs without borrowing huge sums.
Business Secretary Kwasi Kwarteng said last month the new model would give investors greater certainty in the early stages of a project and cut the lifetime cost of a new nuclear plant by £30billion, reducing consumer electricity bills.
National Infrastructure Commission chairman Sir John Armitt has called for more transparency on the upfront cost of nuclear plants in light of the rising bill for Hinkley Point C, in Somerset.