Britain’s flagship nuclear plant could face greater dependence on foreign cash after a string of big-name City firms snubbed a chance to fund the project.
Phoenix, Abrdn and Aviva had said they would consider supporting new nuclear plants and were thought to be in the running to back Sizewell C in Suffolk.
But all have now said they are not in negotiations to take an equity stake in the power station, according to emails sent to campaign group Stop Sizewell C and seen by The Mail on Sunday.
This is a bitter blow for Ministers, who spent years changing the funding model for giant infrastructure works to entice City investors such as Phoenix and Aviva. The model, known as the regulated asset base, enables investors to receive dividends on projects still being built.
Sizewell C has been dogged by delays for years, and the Government has still to finally decide whether it will go ahead.
Snub: Phoenix, Abrdn and Aviva had said they would consider supporting new nuclear plants and were thought to be in the running to back Sizewell C
A series of pension funds, including BT, NatWest, and Nest, have ruled out backing the plant, which will cost at least £20billion.
Alison Downes of Stop Sizewell C said: ‘The Government has spent years planning and legislating to allow the funding model for Sizewell C, with the objective of attracting UK pension funds. The strategy has not succeeded, which is hardly a surprise considering the many uncertainties, including what the project will actually cost.’
In January, the Government committed a further £1.3billion of funding to Sizewell C, which will go on early building work.
Six groups are in talks with the Government over funding the project, with at least one understood to be from the Emirates.
British Gas owner Centrica is also thought to be in the frame.
Pressure is mounting after EDF this year began pressing the Government to help fund cost overruns on Hinkley Point C in Somerset. The French utility group said the price tag for that plant – which is the same type planned for Sizewell C – could hit £46billion from an initial estimate of £18billion. The Suffolk plant could power six million homes for 60 years, but would take nine to 12 years to build.
Ministers have also backed programmes to set up small nuclear reactors, especially a Rolls-Royce-led firm designing these easy-to-assemble plants.
Industry sources say these are likely to be more attractive to investors as they are quicker and cheaper to build.
A Department for Energy Security and Net Zero spokesman said: ‘Sizewell C will mean cleaner, cheaper and more secure energy in the long-term.
‘We are in constructive negotiations with a range of potential investors as part of the equity raise process, and are targeting a final investment decision for Sizewell C later this year.
‘As recognised by the National Audit Office, the Regulated Asset Base model can deliver greater value for money for consumers by lowering the cost of financing construction and we anticipate charges for large-scale nuclear projects to be around £1 a month on average of a typical household bill.’
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