NAO warns Sizewell C nuclear plant costs may outweigh benefits for decades

The National Audit Office (NAO) has issued a stark warning regarding the financial viability of the Sizewell C nuclear plant in Suffolk, stating that its £38bn price tag is subject to “significant uncertainty”. The government’s spending watchdog concluded that while the potential benefits of the project are considerable, they remain uncertain, whereas the risks are “immediate, substantial and borne by the public”. According to the NAO, the costs of the project may outweigh the benefits for UK households until at least 2064, a timeline that could extend further in the event of construction delays or cost overruns.

The project is being developed by French state-owned EDF, with the UK government holding a 37.5% stake following an investment of £14.2bn. EDF has invested £1.1bn to secure its 12.5% stake, while British Gas parent company Centrica owns 15%, the Canadian pension fund La Caisse holds 20%, and Amber Infrastructure owns 7.6%. The plant is expected to begin operations in the late 2030s, generating enough low-carbon electricity for 6 million homes.

A key point of contention is the project’s funding model. Households began contributing to construction costs via energy bills at the start of the year, rather than waiting for the plant to generate power. This regulated asset base model differs significantly from the Hinkley Point C deal, which only begins generating guaranteed revenue from home energy bills once the plant starts producing power in the early 2030s. Critics, including the campaign group Stop Sizewell C, argue this exposes consumers to financial risk if delays occur, while investors are protected from losses.

Sir Geoffrey Clifton-Brown, chair of the public accounts committee, highlighted the historical precedent for such risks. He noted that comparable nuclear projects in the UK and overseas have historically been vulnerable to delays and cost overruns. “Sizewell C is a project of exceptional scale, complexity and significance for taxpayers,” Clifton-Brown said, urging the government to mitigate risk through close monitoring, greater transparency to parliament, and securing value for money.

In response to the scrutiny, Nigel Cann, chief executive of Sizewell C, described the costs on household bills as an “investment in lower long-term electricity costs” that will deliver value to consumers and the country for the rest of the century. The project claims to have sourced 70% of its construction value from UK suppliers, with nearly £5bn spent to date. A government spokesperson maintained that investing in large-scale nuclear power is essential to reduce reliance on volatile global gas markets.