U.K. Starts Talks With EDF on $25 Billion Sizewell Nuclear Plant

(Bloomberg) --

The U.K. gave a boost to large-scale nuclear power projects, saying it wants to unlock investment in at least one plant by the middle of the decade and that it’s starting talks with Electricite de France SA on a project.

The long-anticipated move would help replace the existing generation of atomic plants, all of which are due to retire by the middle of the next decade, and help shore up supplies of pollution-free electricity. It’s also likely to put more taxpayer money on the line in financing giant power plants that can take more than a decade to build and cost $20 billion or more.

“We are determined to both decarbonize our economy in the most cost-effective way, while creating new sunrise industries and revitalizing our industrial heartlands that will support new green jobs for generations to come,” Business and Energy Secretary Alok Sharma said.

This announcement may bring some relief on the other side of the channel after relations between Britain and France have been strained during the negotiations for Britain’s exit from the European Union. EDF is struggling to finish a reactor at Flamanville, which is delayed by more than 10 years, and the nation has put further new projects on hold.

The government said it wants to enable investment in “at least one nuclear power station” before the next election, which is due in 2024. It opened talks with EDF on funding for the Sizewell C development, saying a deal will depend on the French company’s progress on the Hinkley Point C reactor already underway in western England. It could create as many as 25,000 jobs during construction.

After reviewing possible funding methods for years, the government said it sees the Relative Asset Base system as “credible” and will also look at other methods. That model would replicate the way a major sewer project was funded. It differs from the system used to get Hinkley Point C under way, when the government in 2016 handed EDF a fixed price for power once the plant is finished in 2025.

“Negotiations will be subject to reaching a value for money deal and all other relevant approvals, before any final decision is taken on whether to proceed,” the government said in a statement.

The government says it will also continue to engage with the other developers in the U.K. new nuclear market on their proposals for further projects, including Small Modular Reactors and other advanced nuclear technologies. Small modular reactors have been promoted by the nuclear industry as a way to blend steady atomic generation with intermittent renewable energy.

For years, the official government policy has been that the U.K. wants to replace a generation of nuclear plants that are finishing their life in service this decade.

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