Centrica PLC (LSE:CNA) said Sizewell B is set to operate for another 20 years after the UK Government signed Heads of Terms for a regulated Contract for Difference that runs from 2035 to 2055.
The agreement gives the Suffolk nuclear power station, in which Centrica owns 20%, a guaranteed strike price of £70.50/MWh from April 2035 to March 2055, based on 2025 prices and indexed to CPI inflation.
Centrica said the framework removes exposure to merchant power prices and underpins a fair return on life-extension investment of around £800 million on a 100% basis, or roughly £160 million for Centrica’s share.
The company expects the investment to be funded through operating cash flows from its existing nuclear partnership with EDF Energy over the next 15 years, with no need for additional equity to be injected.
Chief executive Chris O’Shea said the deal gives Sizewell B “a clear, regulated framework through to the 2050s” and strengthens Centrica’s portfolio of long-term infrastructure assets with predictable earnings.
The contract with the government is expected to be finalised later this year. Sizewell B is the UK’s only Pressurised Water Reactor and provides zero-carbon electricity for around 2.5 million homes a year.
