UK commits £14bn to Sizewell C nuclear in drive for low-carbon energy future 

The UK government has approved £14.2bn ($19.2bn) for the 3.2 GW Sizewell C nuclear plant in Suffolk, positioning it as a key pillar of the country’s clean energy and industrial strategy. The plant will create 10,000 direct jobs and supply energy to six million homes, contributing to the transition away from fossil fuels and enhancing energy security. It also forms part of a broader commitment to expand nuclear capacity and invest £2.5bn in fusion energy R&D. However, concerns persist regarding the project’s financing structure, long-term affordability and local environmental impacts. A final investment decision on the funding model is expected later this summer. (BBC) 

Why does this matter? Global interest in nuclear power is surging as countries seek to decarbonise their energy systems and bolster energy security. Tech giants, including Google, Microsoft, Meta and Amazon are also making significant investments in the technology to help meet the electricity demands of their data centres. Indeed, the International Energy Agency (IEA) has said that nuclear power is likely to hit a new record in 2025, although barriers such as costs, project overruns and financing must be overcome.  

For example, the EU’s push to expand nuclear power as part of its 2050 climate neutrality goals faces a €241bn ($280bn) funding gap, according to a draft European Commission report seen by Bloomberg. Over 80% of this investment would go towards new reactors, aiming to raise capacity to 109 GW. However, financing remains uncertain, with market-based funding instruments “lacking”. Delays could increase costs by €45bn and reduce capacity by 9 GW. The bloc’s strategy also hinges on extending the life of its ageing fleet beyond 60 years. Without timely delivery, nuclear generation in the EU could fall below 70 GW by mid-century.  

The UK currently generates around 15% of its electricity from approximately 6.5 GW of nuclear capacity spread across five plants. In 2022, the previous government set a target of increasing nuclear capacity to 24 GW by 2050. Given that much of the existing fleet is scheduled for retirement by the end of the decade new developments are essential. Already under construction is Hinkley Point C in Somerset, which started in 2016. The 3.2 GW project, being developed by France’s EDF, was scheduled to complete in 2025 but has been delayed until 2031. Its estimated cost has also risen substantially, up from £18bn in 2018 to £46bn.  

Sizewell C, owned by the government and EDF, was granted consent in 2022. It replicates Hinkley Point C and, according to Energy Secretary Ed Miliband, this will enable the plant to “be built cheaper and faster”. The Labour government’s £14.2bn pledge builds on previous investments bringing total funding to £17.8bn. The estimated cost of the project is £20bn, so private investment is needed to bridge the funding gap. Still, industry experts suggest that the final price tag could reach £40bn, a claim EDF denies. Groundwork at the site is already underway, but construction is expected to take between nine and 12 years, excluding potential delays.  

Concurrently, the UK announced that Roll-Royce SMR has been selected as the preferred bidder to build the country’s first fleet of small modular reactors (SMRs). The £2.5bn government-backed programme, part of the Plan for Change strategy, will see the delivery of three factory-built reactors, each capable of powering one million homes. The first is expected to be operational by the mid-2030s. Yet, the technology remains at a nascent stage, with the only active SMRs located in China and Russia. 

As numerous countries aim to initiate, revive, or scale up their nuclear programmes, the UK's approach will draw significant international attention.