The proposed Sizewell C nuclear power station could face funding challenges after reports that two of the country's largest pension funds will not back the project.
Planning permission for the Suffolk power plant was granted in July 2022 and, in September, former prime minister Boris Johnson confirmed that the government will contribute £700M to its development in one of his final speeches as prime minister. Alongside developer EDF's stake the remaining funding, around 60%, needs to be made up from private investors.
However the BT Pension Scheme and NatWest have now told campaign group Stop Sizewell C and the Daily Mail that they do not plan to provide support.
According to the Daily Mail, an industry source said Sizewell C is not be an appropriate investment for "typical big-name UK pension schemes" due to the risk of cost over-runs and delays.
The potential for large nuclear schemes to face delay and cost challenges has been well documented. The Hinkley Point C project has faced its own challenges, for example. In January 2021, EDF announced that the completion date would be pushed back to June 2026 due to delays arising from the Covid-19 pandemic. Last year, the company then confirmed that there would be a further year-long delay and £3bn cost increase.
Going forward small modular reactors, which can be deployed more quickly, are seen as a crucial tool in the country’s battle against the energy crisis and drive towards net zero. The government established a new body called Great British Nuclear in conjunction with the release of its energy security strategy with the aim of facilitating the growth of nuclear power on the grid.
To date, other potential Sizewell C backers such as Nest and Legal & General have said they do not plan to provide funding. However Centrica is thought to be considering taking a stake, while FTSE 100 savings and retirement firm Phoenix Group has said it is keen to back nuclear.
The industry source added that funding was more likely to come from North America and the Middle East, with Emirati sovereign wealth fund Mubadala said to be in the frame.
A spokesperson from Sizewell C said: “We have a long list of investors who recognise the importance of nuclear and who are following our progress carefully.”
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It looks like ‘ribbon development’ along the coastline. Roll on Tidal power!