Referral of the proposed Sizewell C Final Investment Decision (FID) scheme by the Department for Energy Security and Net Zero (DESNZ) and UK Infrastructure Bank (UKIB)
The Subsidy Advice Unit (SAU) has published a report providing advice to DESNZ and UKIB concerning the proposed Sizewell C FID scheme.
Administrative timetable
| Date | Action |
| 17 June 2024 | SAU’s report published |
| 17 May 2024 | Deadline for receipt of any third-party submissions (submissions after 5pm on this date cannot be taken into account) |
| 3 May 2024 | Beginning of reporting period |
Final report
17 June 2024: The SAU has published its report providing advice to DESNZ and UKIB concerning the proposed Sizewell C FID Scheme. The report sets out the SAU’s evaluation of DESNZ and UKIB’s Assessment of Compliance of the proposed scheme with the requirements set out in the Subsidy Control Act 2022.
- Final Report (17.6.24)
Request from DESNZ and UKIB
3 May 2024: The SAU has accepted a request for a report from the DESNZ and UKIB for the proposed Sizewell C FID scheme. This request relates to a Subsidy Scheme of Particular Interest.
The SAU will prepare a report, which will provide an evaluation of DESNZ and UKIB assessment of whether the scheme complies with the subsidy control requirements (Assessment of Compliance). The SAU will complete its report within 30 working days.
Information about the scheme provided by DESNZ and UKIB
DESNZ and the UK Infrastructure Bank (UKIB) are proposing to make a subsidy scheme that will enable support to be provided to the proposed new nuclear power plant Sizewell C (SZC). The scheme will support the construction, operation and decommissioning of SZC, a proposed two-unit 3.2 Gigawatt nuclear power station. It would sit adjacent to the existing Sizewell B plant and the decommissioned Sizewell A plant on the east coast of Suffolk, and is a near replica of the UK’s only under-construction nuclear plant, Hinkley Point C, deploying the same French-designed EPR technology adapted for the UK.
The scheme would be entered into at a Final Investment Decision (FID), subject to Value for Money (VfM) and all relevant approvals, currently targeted for later this year. This is separate from the SZC Devex Scheme, which is designed to fund development expenditure up until FID.
HMG has developed a targeted financial intervention intended to support SZC and therefore support the delivery of key public policy objectives. The package of measures will be finalised using market feedback received in the course of the ongoing equity and debt raise processes, designed to bring private investment into the project alongside the existing shareholders EDF and HMG, backed by the Regulated Asset Base (RAB) model for nuclear, but it will in any event consist of:
-
an Allowed Revenue – through Nuclear RAB funding, a revenue mechanism for investors to achieve a return on (and of) their investment during the construction, commissioning and the operational periods, plus recovery of the operating expenses of the plant such as fuel and maintenance
-
a Government Support Package – HMG provision of support intended to cover against specific high impact, low probability risks, that private investors would not be able or willing to finance themselves
-
Government Debt and Equity finance
DESNZ have stated that SZC will play a key role in UK Net Zero and energy security policy. In particular, it would provide low carbon electricity that supports delivery of the Net Zero objective at a low system cost as well as security of supply (through domestic generation) and energy system stability (by contributing to reliable, non-intermittent baseload capacity).
HMG has a legal obligation to reach Net Zero carbon emissions by 2050. To support this, carbon budgets place a restriction on the total amount of greenhouse gases the UK can emit over a 5-year period; to help achieve these targets HMG committed to decarbonising the UK’s power sector by 2035, subject to ensuring continued security of supply. In line with this, nuclear energy features in both the 2021 Net Zero Strategy (NZS), and the 2022 British Energy Security Strategy (BESS), in which Government reiterated its 2020 Energy White Paper commitment to reach a FID on at least one new nuclear power plant by the end of this parliament, subject to VfM and all relevant approvals, and set an additional ambition of up to 24 Gigawatt of nuclear capacity by 2050 potentially meeting up to 25% of the UK’s anticipated electricity demand. The Civil Nuclear Roadmap, published on 11 January 2024, set out further detail on the actions government will take to reach this ambition in collaboration with industry.
UKIB is a public policy bank established by HM Treasury (HMT) to boost infrastructure investment across the UK, in pursuit of its strategic objectives: to help tackle climate change, particularly meeting the government’s net zero emissions target by 2050, and to support regional and local economic growth. Clean energy is a priority sector of UKIB and its Strategic Plan identified a role for it in supporting Gigawatt scale nuclear power plants, like SZC, to reach a FID.
Information for third parties
If you wish to comment on matters relevant to the SAU’s evaluation of the Assessment of Compliance concerning DESNZ and UKIB proposed Sizewell C FID scheme, please send your comments before 5pm on the date stipulated in the timetable above. For guidance on representations relevant to the Assessment of Compliance, see the section on reporting period and transparency in the Operation of the subsidy control functions of the Subsidy Advice Unit.
Please send your submissions to [email protected] copying the public authorities at [email protected]
Please also provide a contact address and explain in what capacity you are making the submission (for example, as an individual or a representative of a business or organisation).
Notes to third parties wishing to make a submission
The SAU will only take your submission into account if it can be shared with DESNZ and UKIB. The SAU will send a copy of your submission to DESNZ and UKIB, together with its report. This is to allow the public authority to take account of the submission in its decision as to whether to create or modify the scheme or its assessment.
We therefore ask that you provide express consent for your full and unredacted submission to be shared. We also encourage you to share your submission directly with DESNZ and UKIB using the email address provided above.
The SAU may use the information you provide in its published report. Therefore, you should indicate in your submission whether any specified parts of it are commercially confidential. If the SAU wishes to refer in its published report to material identified as confidential, it will contact you in advance.
For further details on confidentiality of third party submissions, see identifying confidential information in the Operation of the subsidy control functions of the Subsidy Advice Unit.
Contacts
- CMA press team: 020 3738 6460 or [email protected]
Updates to this page
Published 7 May 2024Last updated 17 June 2024 + show all updates
-
Final report published
-
First published.