UK nuclear project Sizewell C to cost consumers more for power than Hinkley Point

Traders Union
All News
Financial News
Sizewell C to cost more

Highlights

NAO reports Sizewell C electricity will cost £131–£155 per MWh in 2024-2025, higher than Hinkley Point C's £129 per MWh, despite lower build cost.
Sizewell C, with projected construction costs of £38 billion to £48 billion, is scheduled to become fully operational by 2039, later than previous government expectations.
Consumers face exposure to higher construction costs, with household bills rising by £4 a year in 2025-2026 and peaking at £19–£21 annually during the plant’s first decade of operation.

NAO report outlines pricing and timeline

As reported by the National Audit Office, electricity from Sizewell C is expected to cost between £131 and £155 per megawatt hour in 2024-2025 prices if construction costs remain within the forecast range of £38 billion to £48 billion.

That compares with £129 per MWh for Hinkley Point C, even though Sizewell C is on course to cost about 22 per cent less to build than the Somerset project. The watchdog says Hinkley’s fixed-price power contract limits the burden on end users because EDF absorbs cost overruns, while higher borrowing costs also raise the expected price of Sizewell’s electricity.

The report also says Sizewell C is not due to be fully operational until 2039. That is more specific than the government’s earlier guidance that the plant would begin generating electricity in the mid to late 2030s.

Sizewell C is designed to supply enough electricity for the equivalent of about 6 million homes over roughly 60 years using EDF reactor technology. The project received approval last year after a prolonged search for funding, with the UK government becoming the largest shareholder alongside EDF, Centrica, La Caisse and Amber Infrastructure.

Consumer bills and wider energy impact

The project is forecast to cost £38 billion to build in 2024 prices, but the financing structure exposes consumers to part of any higher construction bill. Investors are due to share additional costs with consumers if spending rises above £41 billion, and they have agreed to continue funding the project up to £47.7 billion.

Under two more expensive scenarios cited by the NAO, total costs could reach £67 billion to £83 billion in real terms, or £78 billion to £102 billion in nominal terms, including interest and shareholder payouts. The government says returns from its own investment, £3.8 billion of equity and £36.6 billion of debt, are intended to reduce the eventual cost to consumers, who are expected to pay about £1 a month on average during construction.

According to the Department for Energy Security and Net Zero, the project is expected to add £4 a year to a typical household bill in 2025-2026, rising to £19 to £21 a year during its first decade of operation before falling. The department argues that, once built, Sizewell C would save £2 billion a year across the wider energy system and help reduce the UK’s exposure to volatile global gas markets.

The UK Treasury’s consultation on the planned mansion tax set out proposals to raise council tax-style charges on homes worth more than £2 million from April 2028, and examined whether non-UK resident owners should face an additional premium. Our earlier coverage noted the government’s aim to increase annual revenues and address perceived fairness and housing-market pressures, while leaving the “non-resident premium” option undecided pending evidence.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.