Cost of Miliband's nuclear plant doubles to more than £40bn
The cost of the Sizewell C nuclear power plant has doubled to more than £40bn as ministers race to strike a funding deal with private investors and the French government.
An official cost estimate for the scheme in Suffolk, which would generate enough electricity for 6m homes, was previously put at £20bn.
But that has grown to £30bn at constant prices – or £41bn in today's money – with the Government set to shoulder at least half of the upfront cost, according to industry and Whitehall sources.
The entire scheme will ultimately be paid for by households and businesses via their electricity bills, including through levies that will begin during construction.
The power plant's rising price tag will trigger concerns about future increases as Hinkley Point C, a nuclear development in Somerset, has repeatedly overrun budgets and timescales.
On Wednesday, Rachel Reeves, the Chancellor, underlined Labour's commitment to the mega project, arguing that she and Ed Miliband, the Energy Secretary, believed pushing ahead was 'the right choice for bills, the right choice for jobs and the right choice for growth'.
As part of the spending review, Ms Reeves confirmed £14bn of funding for Sizewell C through 2029 – taking the Government's total promised investment to more than £17bn.
The rest will come from a group of private investors, potentially including British Gas owner Centrica, as well as French state nuclear company EDF, which will build and part-own the plant.
EDF is expected to put in up to £2bn of extra cash, enough to secure a stake of about 20pc. That will require sign-off at the highest levels, including from the company's board and the Elysée Palace.
One potential investor suggested EDF would probably maintain a stake of at least 10pc to ensure market confidence. The company will also benefit from the deal through billions of pounds worth of equipment orders.
However, the politics of backing the British plant are complicated in France, where critics believe EDF is already over-exposed to Hinkley Point C and want the state company to focus on projects at home.
'I am sure the French government will try to get something in return for agreeing to put a bit more money in,' the investor added.
A final funding deal is expected to be signed off at an Anglo-French summit next month.
Other potential investors in the frame include Amber Infrastructure Partners, Brookfield Asset Management and the Canadian pension fund CDPQ – run by former John Lewis boss Dame Sharon White in the UK.
On Wednesday, the Government refused to comment on Sizewell C's cost.
Whitehall sources insisted that the estimate had not 'doubled', but did not provide further information.
Sources close to the process have told the Telegraph that the project is expected to cost £30bn in 2015 prices.
This is an increase of 50pc compared with the original £20bn estimate. But the figure rises to £41bn when adjusted for inflation.
The £30bn total includes about £10bn in equity that will be raised from investors and another £20bn of debt.
'Learning curve'
It means that, on a like-for-like basis, the project is on course to be cheaper than Hinkley Point C, which uses a near-identical design. Hinkley is expected to cost £31bn to £34bn in 2015 prices, according to EDF.
The lower cost of Sizewell is due to 'learning curve' efficiencies, with supply chains and skilled workers set to be carried over from Hinkley.
But despite this, and the money committed by Ms Reeves, the Government has so far refused to officially confirm what it expects the project to cost in total.
Alison Downes, of the Stop Sizewell C campaign group, said: 'Given negotiations with private investors are incomplete, Sizewell C really should be excluded from Wednesday's announcements.
'Where is the good news in a project that will cost tens of billions, add to consumer bills and is guaranteed to be late and overspent?'
A spokesman for the Department for Energy Security and Net Zero said: 'Hinkley was built after decades of no new nuclear.
'We are filling the gap with a new nuclear programme which will see greater efficiencies and learnings carried across projects.
'Sizewell C will be an almost exact replica of Hinkley Point C – but crucially learning from previous mistakes and replication.
'EDF says that the second unit of Hinkley is getting built at a rate 25pc quicker than the first, and Sizewell C is effectively a third and fourth version of this reactor.'
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