MPs have challenged the financing arrangements for Sizewell C, warning that electricity consumers and taxpayers face substantial financial exposure while private investors receive returns that are relatively protected against construction cost overruns.
The House of Commons Public Accounts Committee has described the terms secured for the Suffolk nuclear project as an exceptionally poor deal for the public. Its report examines an estimated construction cost range of £40.5bn–£47.7bn, alongside the risks associated with completing and financing the power station.
If construction costs reach the upper end of that range, consumers could pay an additional £9.8bn during construction and another £12bn over the plant’s anticipated 60-year operating life. Under the same scenario, private investors would be required to contribute only another £30m in cash.
Those figures represent the committee’s examination of a potential cost increase, not payments already made. The additional consumer costs incorporate the effects of financing and payments to lenders and shareholders over time, rather than simply representing the difference between the two construction estimates.
Sizewell C is being developed through a regulated asset base financing model, under which electricity consumers contribute towards the project during construction. Unlike a conventional commercial development funded entirely by investors until operations begin, the arrangement allows part of the financing cost to be recovered before the completed station generates electricity.
The Department for Energy Security and Net Zero holds a minority equity stake in Sizewell C Ltd, while private investors collectively own the majority. Government nevertheless provides most of the debt financing, including up to £37bn through the National Wealth Fund. A further £5bn comes from commercial lenders supported by French export credit guarantees.
The committee is concerned about the relationship between public financial exposure and the returns available to private investors. It reports that investors may receive annual returns exceeding 10%, while the financing structure limits how much additional cash they must contribute if construction costs rise within the assessed range.
The arrangements also include government guarantees and commitments extending beyond construction. Taxpayers could be required to meet any remaining shortfall in decommissioning funding after the station’s operating life, adding another potential liability to the public balance sheet.
The Government argues that using the same European Pressurised Reactor design being built at Hinkley Point C will help reduce delivery risk. Sizewell C’s design is approximately 85% the same as the more mature Hinkley design, allowing engineering knowledge and construction experience to be transferred between projects.
However, the committee points to a history of cost overruns and delays involving comparable reactors in Finland, France, China and the United Kingdom. It expects Sizewell C’s construction to finish between 2039 and 2043, leaving a prolonged period during which financing requirements, contractor performance and delivery milestones will need to be monitored.
Parliamentary oversight is another concern. While shareholders are expected to receive progress reports every six months, existing plans provide for Parliament to receive an annual report. The committee wants the department and Sizewell C Ltd to report twice yearly on actual and forecast spending, delivery milestones, construction risks, consumer bill impacts and expected investor returns.
It has also requested the scenario analysis underpinning the project’s cost and timetable estimates, along with machine-readable reporting data. Significant design changes or forecasts that cease to be reliable should be reported outside the normal six-month cycle.
The committee recognises the potential for Sizewell C to support British manufacturing, engineering employment and specialist skills. It is seeking greater clarity over how those benefits will persist beyond construction, particularly where public investment supports the development of domestic nuclear supply chain capabilities.
Sizewell C’s delivery arrangements therefore place responsibility for long-term cost control and transparent reporting alongside the project’s engineering commitments. The committee has called for a system in which Parliament can examine emerging financial risks with the same frequency as the private shareholders funding the development.
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