The UK government reportedly intends to take a 20% stake in a new nuclear plant at Sizewell, Suffolk, worth £20bn, with a similar share also to be taken by French giant EDF in the delayed plant.
The media reports come as Prime Minister Boris Johnson recently told nuclear executives he plans to use nuclear power to supply 25% of the UK's electricity needs and to boost domestic energy security after Russia’s invasion of Ukraine.
Designed to be built next to the existing Sizewell B pressurised water reactor, which in 2020 generated low carbon electricity for 2.3mln homes, Sizewell C is expected to generate enough low carbon electricity to power 6mln homes. The construction will cost around £20bn, though inflation could push the price up.
The move aims to remove the Chinese state-owned energy group CGN from the nuclear plant in Suffolk, the FT reported.
The revised plan calls for the UK government and developer EDF to hold a 20% stake each in the project, ending CGN's involvement in the project, mirroring the deterioration of diplomatic relations between Beijing and London in recent years.
Nuclear energy is a key component of the UK government's carbon-reduction plan, with the goal of achieving net zero emissions by 2050.
Chancellor Rishi Sunak allocated £1.7bn in his budget last October to fund a new plant. It will be used to invest in Sizewell C, which will be operational in the late 2030s.
The BBC reported that French energy giant EDF will also take a 20% stake in the plant, with ministers hopeful that the confirmation of two key investors will convince pension funds and infrastructure investors to take up the remaining 60%.
Next month, the House of Commons is set to consider new legislation that will allow the construction and financing costs for Sizewell C to be added to customers' energy bills.
Sizewell C was earmarked for development by the UK government with a commitment of £100mln. The £20bn in capital is expected to be financed with one-third through equity and the rest through debt borrowing from the financial markets.
The UK currently has six nuclear power stations generating around 16% of its electricity. However, three of the plants will retire by March 2024 and all but one will retire by 2030.