Background to the report

In July 2025, the Department for Energy Security & Net Zero (DESNZ) announced that it had reached a deal with Électricité de France (EDF) and other investors to invest in Sizewell C. Sizewell C is a new large-scale nuclear power station being built in Suffolk. It is expected to start producing electricity from 2038 and operate for at least 60 years, providing electricity for the equivalent of six million homes. It is intended to support delivery of a secure and constant supply of low-carbon energy for the UK.

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Sizewell C is the second nuclear power station to be built in the UK since the 1990s and follows EDF’s current project to build Hinkley Point C in Somerset. DESNZ believes that replicating the design of and applying the learning from Hinkley Point C will reduce the risks of construction time and cost overruns at Sizewell C.

DESNZ has developed a new delivery and financing model for Sizewell C, intended to reduce the financing cost of the project and reduce the risk of construction delays and cost overruns. Rather than either creating a government delivery body, or providing support to a private infrastructure project (as it did for Hinkley Point C), DESNZ’s approach to Sizewell C combines: delivery through a joint venture, Sizewell C Ltd; a ‘government support package’ provided by DESNZ; government providing most of the project’s finance to the Company; and a nuclear ‘regulated asset base’ model.

Scope of the report

This report assesses the implications of the deal for taxpayers, electricity consumers, and investors, and provides a baseline against which progress can be measured. It sets out:

  • the set-up of the project, including its business case, replicating Hinkley Point C, and cost forecasts
  • the negotiations and main features of the deal between DESNZ and other investors, and costs and returns to different parties
  • how DESNZ and the Company are managing key risks to delivery

Video summary

Joshua Reddaway, the report’s director, summarises our findings.

Conclusions

DESNZ believes Sizewell C will lower electricity system costs compared with alternative ways of achieving net zero. This is uncertain because it is hard to predict the future costs and likelihood of success of alternative technologies, but DESNZ has reasonably argued that, because Sizewell C uses a proven technology, it reduces risk across its portfolio. Sizewell C still carries major delivery risks: no nuclear power station of its type has so far been built without delays or cost increases.

DESNZ hopes that a new delivery and financing model, designed so the taxpayer and consumer take on more of the project risks, together with replicating the design of Hinkley Point C and more mature cost estimates, mean Sizewell C will deliver to time and budget where others did not. But this approach has costs and its justification relies on some big assumptions.

DESNZ has intentionally limited the government’s control over the project by sharing ownership with other investors, seeking to avoid governance weaknesses that have beset other mega-projects. The sharing of risk with the taxpayer and consumer appears to have reduced the cost of financing the project, but the rewards for investors still appear high, given their limited exposure to project risk. The extent to which investors will be incentivised to control project costs in the way DESNZ assumes is unclear.

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Press release

View press release (20 May 2026)

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