Rachel Reeves has agreed to pump billions of pounds into Britain’s nuclear energy sector, putting £14.2bn towards construction of the new Sizewell C nuclear power station.
The multi-billion pound investment will be confirmed by the chancellor at the GMB union’s annual congress on Tuesday, just days before she is expected to make sweeping cuts to unprotected departments at Wednesday’s spending review.
The Suffolk plant, which ministers said would power the equivalent of six million homes, is expected to take around a decade to complete, with officials hoping it will be operational before the end of the 2030s.
It is central to delivering a “golden age of clean energy abundance”, the energy secretary said, arguing it would boost Britain’s energy security by reducing reliance on buying power from overseas.
The project will be funded via household electricity bills, adding about £1 a month to the cost of power over the plant’s 60-year lifespan. But it is hoped that the overall impact of the plant will be lower bills as a result of a cheaper energy supply.
Nuclear plants are seen as increasingly important electricity sources as the government tries to decarbonise Britain’s grid by 2030, replacing fossil fuels with green power.
The investment comes amid concerns that the dash towards clean power could reduce our energy security and leave Britain vulnerable.
Nuclear power will be a key winner at the chancellor’s spending review this week, amid fears the Home Office will be forced to cut police numbers and growing questions over how the government will fund its £1.25bn decision to U-turn on winter fuel.
There have been months of wrangling over departmental budgets as the chancellor seeks to ring fence health spending, increase defence to 2.5 per cent of GDP and possibly water down proposals on benefit cuts.
Trade unions welcomed the decision to invest in Sizewell C, which the Treasury said would go towards creating 10,000 jobs, including 1,500 apprenticeships.
But campaigners warned the full cost of the development remains unclear and could far exceed the initial investment.
The last time Britain completed one was in 1987, which was the Sizewell B plant.
Hinkley Point C, in Somerset, is still under construction and is expected to produce enough power for about six million homes when it opens, but that may not be until 2031.
But energy secretary Ed Miliband promised that Sizewell C would be “faster and cheaper” because it will be a replication of the Hinkley plant.
“Hinkley was the first of a kind project in the UK, and there’s always challenges you face with that”, he told Sky News.
“The important thing about Sizewell is it replicates it, and, if you like, there’s some good evidence that it can be cheaper and quicker, because the second unit at Hinkley, the original plant, is being built 25 per cent faster than the first unit.”
Mr Miliband added: “The big picture, I’d say, is that we need nuclear and renewables as part of the clean energy system of the future, and our job in coming into government was to get on and deliver and that’s what we’re doing today – the biggest investment in nuclear for half a century.”
At the peak of construction, Sizewell C is expected to provide 10,000 jobs and the company behind the project has already signed £330 million worth of contracts with local businesses – something Mr Miliband said is part of an attempt to prevent “continued decline” in Britain.
“Why are we doing this? For energy security, for good jobs – 10,000 jobs from Sizewell alone – to tackle the climate crisis and get off insecure fossil fuels. And it’s a big investment in the future of the country, because we don’t want to see continued decline. We want to see that investment”, he said.
The government is also due to confirm one of Europe’s first small modular reactor programmes and will invest £2.5bn over five years in fusion energy research as part of plans to boost the UK’s nuclear industry.
The GMB union said giving Sizewell C the go-ahead was “momentous”.
Regional Secretary Warren Kenny said: “Nuclear power is essential for clean, affordable, and reliable energy – without new nuclear, there can be no net zero.
“Sizewell C will provide thousands of good, skilled, unionised jobs and we look forward to working closely with the Government and Sizewell C to help secure a greener future for this country’s energy sector.”
However, Alison Downes of Stop Sizewell C said ministers had not “come clean” about the full cost of the project, which the group have previously estimated could be some £40 billion.
“There still appears to be no final investment decision for Sizewell C, but £14.2bn in taxpayers’ funding, a decision we condemn and firmly believe the government will come to regret,” she said.
“Where is the benefit for voters in ploughing more money into Sizewell C that could be spent on other priorities, and when the project will add to consumer bills and is guaranteed to be late and overspent just like Hinkley C?
“Ministers have still not come clean about Sizewell C’s cost and, given negotiations with private investors are incomplete, they have signed away all leverage and will be forced to offer generous deals that undermine value for money. Starmer and Reeves have just signed up to HS2 mark 2.”
