Select committee inquiry
Sizewell C
Open
What the inquiry is looking at
“Sizewell C is a planned large-scale nuclear power station on the Suffolk coast. Funded by the government in partnership with the energy provider EDF, as well as private finance, the project is projected to cost £40.5bn to £47.7bn. When constructed, it will have a generating capacity of 3.2GW, meaning it will be able to generate around 7% of the UK’s current electricity demand. The Public Accounts Committee (PAC) previously reported on the government's deal with EDF to construct a nuclear power station at Hinkley Point, the site with Sizewell C will be based on. The PAC were concerned that that government's negotiations were not championing the interests of consumers, who might be locked into an expensive deal for decades, and warned that the poorest would likely be the hardest hit. In its response , the Government accepted all of the PAC’s recommendations and stated the actions it planned to take in response. The National Audit Office (NAO) will publish its report on Sizewell C in spring 2026. Following the NAO’s investigation, which is likely to examine the government’s current spend, as well as the potential risks to achieving value for taxpayer’s money, the PAC will hear from senior officials at the Department for Energy Security and Net Zero and Sizewell C on the reports key findings. If you have evidence on these issues, please submit here by 23.59 on Monday 18 May 2026. Please note that the Committee’s inquiry cannot assist with individual cases. If you need help with an individual problem you are having, you may wish to read the information on Parliament’s website about who you can contact with different issues .”
The committee's words, from the inquiry page on parliament.uk ↗.
What it found
In the committee's words, from the summary of 17th Report - Sizewell C ↗
Sizewell C represents a terrible deal for the UK taxpayer. Successive governments’ failure to deliver new nuclear has left the UK in a position where the best terms it could secure to deliver Sizewell C mean that consumers and taxpayers shoulder significant financial risks, while private investors enjoy protected profits. The UK must never be put in this position again.
Sizewell C is a high-risk mega project with an estimated construction costs in the range of £40.5 billion to £47.7 billion. It is expected to be fully operational in 2039 and operate for at least 60 years. The Department for Energy Security and Net Zero (the Department) argues that applying lessons learned from the UK’s other current major nuclear project, Hinkley Point C, and replicating the design of its pressurised water reactors, will reduce risks at Sizewell C. However, no comparable nuclear power station anywhere in the world has been delivered on time and on budget. Projects using the same reactor design have experienced delays of up to 14 years and substantial cost overruns.
The Department has chosen a novel delivery model for Sizewell C in which it relinquishes majority control, despite the public providing most of the financing and bearing most of the risk. The government will therefore rely heavily on its influence through the boards of Sizewell C to steer the project in the interests of taxpayers and electricity consumers. However, it is simply not credible to assume that public and private interests will always align or be reconcilable. For example, a divergence of interests is particularly likely if costs threaten to exceed the limit investors have agreed to fund. Government needs to plan for this in advance.
We are concerned that if costs rise above the baseline—and they are highly likely to—consumers will pay through higher bills, while private investors face little risk to their capital and yet still expect high returns. If construction costs rise to £47.7 billion, which is at the top of the Department’s estimated range, consumers could pay £9.8 billion more during construction and a further £12 billion over Sizewell C’s 60-year operating life, while private investors only need to put in an extra £30 million. Taxpayers also cover many of the other risks. For instance, the taxpayer will pay any final shortfall in funding for the decommissioning of Sizewell C. This all makes it difficult to justify annual investor returns of over 10% and raises concerns about whether investor incentives are strong enough to promote efficient delivery. The Department should make every effort to avoid rising costs for consumers and taxpayers.
Given the costs and risks to the taxpayer, Sizewell C should operate to the highest standards of transparency in major infrastructure delivery, with clear and publicly accessible data so that taxpayers, consumers and future infrastructure projects benefit. Reporting once a year would be totally inadequate given the project’s level of risk. The shareholders will benefit from a six-monthly update verified by an independent technical advisor – Parliament and the public require the same level of transparency and assurance.
A situation in which consumers and taxpayers are exposed to substantial construction and financing risks, while private investors enjoy high and protected profits, cannot happen again. The Department explained why it believes these terms were the best it could negotiate in the current market.
Therefore the Government’s most important task for the future is to build confidence that investment in UK nuclear power infrastructure can offer secure and predictable returns, so that future deals can be negotiated on better terms and the financial risks of any future schemes distributed more fairly. It is crucial that the UK seizes this opportunity to demonstrate it can break the track-record of poor delivery of nuclear projects and deliver Sizewell C on time and on budget. This will help future investors to see future projects as lower risk. It is also vital to develop the skills and experience of our nuclear workforce, strengthen our nuclear supply chains and work across government to secure the best possible legacy from the infrastructure created to support Sizewell C’s construction.
Conclusions and recommendations
1. Sizewell C is a high-risk mega project. No comparable nuclear power station anywhere in the world has been built on time and to budget. Sizewell C is expected to cost between £40.5 billion and £47.7 billion and is expected to finish construction between 2039 and 2043. It is being built using a design that has previously been used in France, Finland, China, and is also being built in the UK at Hinkley Point C. The design has a poor international delivery record, with a clear pattern of delays and cost escalations. The Department is relying on Sizewell C’s more mature design—85% the same as the completed Hinkley Point C design—and the transfer of learning from Hinkley Point C for the project to succeed where others have not. But it remains a highly complex infrastructure mega project with substantial uncertainty over its cost and schedule. This level of risk makes transparency particularly important. We are pleased that Sizewell C and the Department intend to use a consistent understanding of the forecast costs, verified by an independent technical advisor. However, while the shareholders will benefit from six-monthly reports, current plans are for the Department and Sizewell C Ltd to provide Parliament with only an annual report on these forecasts. This is totally inadequate for a project with significant exposure for taxpayers and consumers and could mean that emerging risks remain hidden for longer and are more costly to address when they do become apparent.
recommendation a. Sizewell C should be clearer on the level of risk it faces. Within three months of this report, Sizewell C Ltd should write to the Committee with the scenario analysis that it used to underpin its estimates of the Lower and Higher Regulatory Threshold cost estimates and schedules, its current assessment of the risk that each scenario comes true, and any new scenarios it is aware of.
b. Sizewell C Ltd and the Department should provide Parliament with a progress report every six months. The report should include the latest: actual and forecast costs; changes to cost and schedule forecasts; progress against key milestones; changes to the risk the public sector and consumers face; expected impacts on consumer bills; and forecast investor returns. They should also include any relevant narrative made by the Independent Technical Advisors during the period covered.
c. Sizewell C Ltd and the Department should publish the underlying data for its Sizewell C progress reports in machine readable formats. Figures should be presented consistently in nominal and real terms. Where information is withheld from these reports due to commercial or security sensitivities, Sizewell C Ltd should explain the basis for withholding it.
d. Sizewell C Ltd and the Department should write to the Committee as soon as possible outside the six-monthly reporting cycle if developments mean that the most recently reported cost or schedule forecasts are no longer reliable, or if there is a significant design change that materially affects the cost or delivery timetable of the project and its impacts on consumers.
What the government said
Government response awaited: deadline 28 December 2026.
How the inquiry has run so far
Each dot is a dated item listed on this page, from the inquiry's opening on 20 March 2026 to 28 December 2026. The dashed mark is the deadline Parliament records for the government's response.
- Oral evidence 8 Jun 2026
- Report 28 Oct 2026
- Correspondence 3 letters
What it recommended 7 recommendations · 25 conclusions
1Sizewell C is a high-risk mega project.
Recommended (the committee's words)
Sizewell C is a high-risk mega project. No comparable nuclear power station anywhere in the world has been built on time and to budget. Sizewell C is expected to cost between £40.5 billion and £47.7 billion and is expected to finish construction between 2039 and 2043. It is being built using a design that has previously been used in France, Finland, China, and is also being built in the UK at Hinkley Point C. The design has a poor international delivery record, with a clear pattern of delays and cost escalations. The Department is relying on Sizewell C’s more mature design—85% the same as the completed Hinkley Point C design—and the transfer of learning from Hinkley Point C for the project to succeed where others have not. But it remains a highly complex infrastructure mega project with substantial uncertainty over its cost and schedule. This level of risk makes transparency particularly important. We are pleased that Sizewell C and the Department intend to use a consistent understanding of the forecast costs, verified by an independent technical advisor. However, while the shareholders will benefit from six-monthly reports, current plans are for the Department and Sizewell C Ltd to provide Parliament with only an annual report on these forecasts. This is totally inadequate for a project with significant exposure for taxpayers and consumers and could mean that emerging risks remain hidden for longer and are more costly to address when they do become apparent. recommendation a. Sizewell C should be clearer on the level of risk it faces. Within three months of this report, Sizewell C Ltd should write to the Committee with the scenario analysis that it used to underpin its estimates of the Lower and Higher Regulatory Threshold cost estimates and schedules, its current assessment of the risk that each scenario comes true, and any new scenarios it is aware of. b. Sizewell C Ltd and the Department should provide Parliament with a progress report every six months. The report should include the latest: actual and forecast costs; changes to cost and schedule forecasts; progress against key milestones; changes to the risk the public sector and consumers face; expected impacts on consumer 3 bills; and forecast investor returns. They should also include any relevant narrative made by the Independent Technical Advisors during the period covered. c. Sizewell C Ltd and the Department should publish the underlying data for its Sizewell C progress reports in machine readable formats. Figures should be presented consistently in nominal and real terms. Where information is withheld from these reports due to commercial or security sensitivities, Sizewell C Ltd should explain the basis for withholding it. d. Sizewell C Ltd and the Department should write to the Committee as soon as possible outside the six-monthly reporting cycle if developments mean that the most recently reported cost or schedule forecasts are no longer reliable, or if there is a significant design change that materially affects the cost or delivery timetable of the project and its impacts on consumers.
2The Department has relinquished control over Sizewell C to a delivery body that is majority...
Recommended (the committee's words)
The Department has relinquished control over Sizewell C to a delivery body that is majority owned by private investors. The Department’s novel approach to building Sizewell C means it holds a minority shareholding, but the government and consumers provide most of the money and bear most of the risk. This leaves the delivery body on the government’s balance sheet but not in the Department’s control. The Department argues that involving private investors and sharing governance with them will improve delivery and address weaknesses seen in other government projects. However, its ability to intervene directly may be constrained when risks materialise, raising concerns about whether the public interest will be protected. The Department relies on its expert representatives on Sizewell C’s company boards being able to influence private shareholders to protect taxpayers and electricity consumers. We are less confident than the Department that this influence will always be sufficient. Furthermore, this governance structure designates the Sizewell C Ltd Chief Executive as its Accounting Officer (AO) for Parliamentary accountability purposes. A board dominated by private investors could direct the company in ways that conflict with the AO’s personal responsibilities under Managing Public Money. While ministers can formally override AOs through ministerial directions, they are themselves directly accountable to Parliament. The company boards are not accountable to Parliament in the same way. 4 recommendation In its Treasury Minute response: a. The Department should set out how it will monitor and evaluate the effectiveness of this novel approach to inform choices across government about future projects. b. The Department should set out what action it will take to ensure that it possesses sufficient capability to act as an effective shareholder and protect the interests of taxpayers and consumers, including the skills and experience required of government expert representatives and arrangements for independent challenge. c. The Department should set out what metrics it will use to assess whether its shareholder representatives have the requisite skills and experience, and are using these effectively to defend the interests of taxpayers and electricity consumers. d. The Department and Sizewell C Ltd, with advice from the Treasury Officer of Accounts, should set out the process for resolving any situation in which the Sizewell C board directed the Chief Executive to take an action that conflicted with one or more of the Chief Executive’s responsibilities as Accounting Officer under Managing Public Money, and commit to informing Parliament when such concerns or conflicts arise.
3The Department’s failure to maintain a market for nuclear left it with only one option,...
Recommended (the committee's words)
The Department’s failure to maintain a market for nuclear left it with only one option, despite its demonstrably poor construction record. The Department’s decision to proceed with Sizewell C and its reactor design reflected the fact that the Department had no viable alternatives for large-scale nuclear delivery. Over more than a decade, six other potential sites either dropped out of the market or failed to progress, reducing competition and leaving only the European Pressurised Reactor. This design has a poor international delivery record, with a clear pattern of delays and cost escalations. In part, this was because the private sector was unable or unwilling to take on the level and types of risk the government was then seeking to transfer to it. This lack of competition mattered because it constrained the Department’s commercial leverage and strategic flexibility, while leaving it reliant on a technology with an international track record of cost overruns and delays. 5 recommendation The Department should set out in its Treasury Minute response how it will create and maintain a competitive market for nuclear power technologies so that it has more options in future, and how it will report on progress in developing a mature nuclear sector within the UK capable of supporting future projects.
4Ultimately, the Department was only able to secure the Sizewell C deal by accepting a...
Recommended (the committee's words)
Ultimately, the Department was only able to secure the Sizewell C deal by accepting a high level of risk for UK taxpayers and consumers and a low level of risk but high returns for the private investors. If construction costs rise from £40.5 billion to £47.7 billion, consumers would pay £9.8 billion more during Sizewell C’s construction and a further £12 billion over its 60-year operating life in order to cover the additional payments to debt providers and shareholders as well as the additional construction cost (all in real terms). By contrast, the funding model means private investors would only need to contribute an additional £30 million in cash. In addition to taxpayer equity and debt financing, government has provided a series of guarantees, at least one of which has a maximum value of £70 billion (nominal). These financing arrangements allow the private investors to enjoy strong returns while bearing limited downside risk. Investors’ annual rates of return reduce by up to 1.6 percentage points if the project costs increase to £47.7 billion, mainly because the project would take longer to complete. However, the returns would still remain above 10%. This all breaks the rule that financial returns be proportionate to the risk and raises concerns about whether investor incentives are sufficiently aligned with delivery performance. The Department explained why it believes these terms were the best it could negotiate in the current market. It used a competitive process and achieved a deal that secured what it wanted in terms of EDF and private investor involvement, at a price it saw as acceptable. However, investors clearly required a ‘nuclear premium’, which is a reflection on the market’s confidence in the UK’s track record in nuclear construction and the bumpy nature of the nuclear pipeline to date, with large gaps of many years between projects, and changing financing models. The government’s ambition should be to create the conditions for private investment in UK nuclear infrastructure to be based on expecting secure and predictable returns, rather than being seen as a high-risk investment. 6 recommendation In its Treasury Minute response, the Department should set out how it will build confidence that future investment in UK nuclear power infrastructure can offer secure and predictable returns, so the financial risks of any future schemes, including small modular reactors, can be distributed more fairly, and provide a stronger link between investor returns, project delivery performance and investor risk exposure. This should include how it plans to put in place the necessary conditions to reduce the nuclear premium investors charge towards zero for future projects.
5It is important that the UK captures the lion’s share of economic value from Sizewell...
Recommended (the committee's words)
It is important that the UK captures the lion’s share of economic value from Sizewell C and that the project creates a lasting legacy for the UK and Suffolk. While Sizewell C relies on French manufacturing for its core reactor technology, the project is expected to generate significant local and national economic benefits to UK businesses and support thousands of jobs, both directly and across its supply chain. Independent analysis suggests the total added value to the UK economy during construction could reach £26.6 billion of which £4 billion is committed to Suffolk and the East of England. However, a substantial proportion of the highest-value components and specialist expertise will be sourced from overseas. This limits the extent to which the UK captures the full economic value of the project including the benefits to the UK’s nuclear workforce and supply chains. For a project of this scale, funded largely by consumers and the public sector, it is important that the Department can demonstrate that the promised economic benefits to the UK are being realised and support long-term infrastructure and skills development for positive economic impacts. For example, Sizewell C is investing in local skills development by building a new education campus. It estimates that there will be 17,000 direct and indirect jobs at peak construction and it is committed to 1500 apprenticeships. In total, it could support 70,000 jobs in the supply chain. It is improving road and rail infrastructure and is sourcing 77% of its steel from British sources. These investments in UK businesses, skills and infrastructure need to act as a catalyst for economic growth both locally and nationally and ensure that the project leaves a lasting legacy across the UK. recommendation a. In its Treasury Minute response, the Department should set out: ○ its plan for working across government departments to capture a lasting legacy for the UK and the local community from the infrastructure, the development of skills, supply- chain capabilities, and the capacity to manage and monitor mega-projects; and 7 ○ how it will ensure that Sizewell C meets it target of 70% of construction spend in the UK, and ensures that associated jobs remain in the UK. b. Sizewell C Ltd should regularly monitor the proportion of its supply chain which is sourced beyond the UK and include this in its regular reporting to Parliament. c. Sizewell C and all the relevant local authorities and government bodies should form a legacy board whose purpose is to complete a report in 5 years to propose what infrastructure such as houses, schools, healthcare facilities, research institutions will be provided by Sizewell C Ltd as their contribution to the legacy of Suffolk and the wider UK.
6It will be important that Sizewell C has a culture where staff feel able to...
Recommended (the committee's words)
It will be important that Sizewell C has a culture where staff feel able to raise concerns, particularly about safety. Poor workplace culture has been a persistent challenge at civil nuclear sites. The Committee has previously highlighted concerns at organisations such as the Nuclear Decommissioning Authority and Sellafield. More recently, similar concerns have been reported at Hinkley Point C, including unofficial strikes linked to allegations of poor behaviour by senior staff. Sizewell C Ltd has introduced measures intended to address these risks. While these are positive steps, experiences elsewhere demonstrate that formal processes alone are not sufficient to ensure cultural change. Their effectiveness will depend on whether they are consistently applied in practice and trusted by the workforce. For a project of this scale and complexity, a strong workplace culture is important not only for staff wellbeing, but also for safe and effective delivery. recommendation Sizewell C Ltd should set out in its Treasury Minute response what lessons it has learnt from organisations such as Hinkley Point C, the Nuclear Decommissioning Authority and Sellafield about workplace culture, and how it will embed a culture which eliminates unacceptable workplace behaviours and supports whistleblowers.
7Decommissioning a nuclear power station is expensive and comes with the risk that costs spiral...
Recommended (the committee's words)
Decommissioning a nuclear power station is expensive and comes with the risk that costs spiral beyond the allocated budget. There is a historical trend of nuclear power station decommissioning taking longer and costing more than expected, with these additional costs being picked up by the UK taxpayer. Sizewell C and the Department have undertaken analysis and assurance of the required costs to decommission Sizewell C. Sizewell C Ltd will set aside money over the course of its operational lifetime to cover its decommissioning, funded by consumers. Sizewell C is expected to invest 8 between £5.1 billion and £5.8 billion nominal into this fund (£2.3 billion and £2.5 billion in 2024–25 real terms) with the rest of the estimated £12 billion (2022 real terms) of decommissioning costs coming from the accumulation of the invested funds. The Committee nevertheless remains concerned that history will repeat itself. Consumers will pay more if there are increases in the decommissioning budget or investment underperformance while Sizewell C is operating. If decommissioning costs rise above the level of the consumer-funded pot when Sizewell C is no longer operating, then the taxpayer will be called upon to cover the shortfall. recommendation Sizewell C Ltd, supported by the Department, should publish its annual and five-yearly updated Funded Decommissioning Programme reports and forecasts in accordance with its stated intention to do so, alongside a narrative setting out how this compares to the level of funding it expects decommissioning to require. 9 10 1 The Department’s deal Introduction
8We asked about the current arrangements proposed for reporting progress to Parliament.22 Sizewell C described...
Concluded (the committee's words)
We asked about the current arrangements proposed for reporting progress to Parliament.22 Sizewell C described how cost increases, risks and contractual variations would be reported frequently internally but the Department told us that Sizewell C will report to Parliament on an annual basis.23 Sizewell C did not set out clearly how material changes in forecasts or major design variations would be reported externally.24 When we noted that this involves less frequent and more limited updates than either publicly quoted companies or HS2, the Department agreed to consider this further.25 Government’s influence over the project
9Until the government made a final investment decision on Sizewell C in July 2025, the...
Concluded (the committee's words)
Until the government made a final investment decision on Sizewell C in July 2025, the Department held 90% of the equity in the company. It now holds a minority equity stake of 44.9% which gives the Department “veto rights but does not give [it] control”.26 This is despite the public sector providing the majority of the project’s financing. In addition, the government has put in place a support package under which certain risks are effectively underwritten by the taxpayer. This includes arrangements whereby, if the project fails to deliver on schedule or costs rise significantly, the public sector could be exposed to substantial financial consequences if costs exceed the higher regulatory threshold.27
10The Department emphasised that its joint venture model is intended to bring the benefits of...
Concluded (the committee's words)
The Department emphasised that its joint venture model is intended to bring the benefits of both public and private sector involvement.28 Sizewell C and the Department, pointed to lessons learned from previous major projects, including the Stewart review of HS2,29 which concluded that civil service oversight had been underpowered and lacked sufficient commercial capability.30 The Department told us that involving private investors and establishing governance arrangements including non-executive directors would strengthen project delivery.31 Expert civil servants acting as non-executive directors on Sizewell C boards are how the government will represent government and public interests in this structure.32 22 Qq 56-59 23 Qq 57-58 24 Q 57 25 Qq 57-59 26 Q 31; C&AG’s Report, paras 1.8, 2.2 27 C&AG’s Report, paras 3, 2.2 and 2.15 28 Q 28 29 Qq 18, 28, 34 30 Stewart Review, Major Transport Projects Governance and Assurance Review: The HS2 Experience, 18 June 2025, James Stewart 31 Q 28 32 C&AG’s Report, para 3.4 14
11In government, permanent secretaries (as accounting officers) have direct responsibilities to Parliament while serving ministers,...
Concluded (the committee's words)
In government, permanent secretaries (as accounting officers) have direct responsibilities to Parliament while serving ministers, from whom most of their authority derives.33 This dual accountability for permanent secretaries works because there are arrangements, such as ministerial directions, that create transparency for Parliament about disagreements between these parties and who has made key decisions.34 Ministers are themselves accountable to Parliament.35 Sizewell C’s Chief Executive is accountable to Parliament as an accounting officer, and said he would consult the Department’s permanent secretary (as his principal accounting officer) about disagreements. However, the Chief Executive’s authority over Sizewell C derives from the board, which is not controlled by government or Parliament.36 The Department cannot direct the company and the board does not have its own, separate, accountability to Parliament.37 We questioned the witnesses about how they would manage a scenario in which the board votes for an outcome which goes against any of the four accounting officer principles.38 The Department and Sizewell C argued, respectively, that “all stakeholders are aligned to drive value for money” and that it was “hard to imagine a scenario where we would be out of step”.39 The lack of a nuclear market
12The number of competing large-scale nuclear sites has reduced over time, as the six alternative...
Concluded (the committee's words)
The number of competing large-scale nuclear sites has reduced over time, as the six alternative developments have fallen away. This left the Department with only one viable option for new nuclear capacity and constrained the range of choices available when progressing Sizewell C.40
13The NAO report indicates that, over time, other non-EPR nuclear projects did not proceed, reducing...
Concluded (the committee's words)
The NAO report indicates that, over time, other non-EPR nuclear projects did not proceed, reducing competitive tension in the market.41 The Department described this history as “developers dropping away … because they were not able to pursue” the Hinkley contracts for difference approach that had placed full construction risk on private funders or developers.42 When we asked the Department why it chose a funding model which gives “a lot more risk exposure to the public”, the Department stated 33 HM Treasury, Managing Public Money, April 2026, chapter 3. 34 Comptroller & Auditor General, Accounting officer assessments: improving decision- making and transparency over government’s major programmes, Session 2022–23, HC 65, July 2022, paras 1.2-1.3 and Figures 1 and 2. 35 HM Government, The Ministerial Code, October 2025. 36 Q 62; C&AG’s Report, para 3.4 and Figure 13 37 Q 32; C&AG’s Report, para 3.4 38 Qq 63-66 39 Q 65 40 C&AG’s Report, para 10 and Figure 1 41 C&AG’s Report, para 10 42 Q 20 15 that “there was insufficient market appetite in the private sector … to take on the entirety of the development and build”.43 While the Department maintains that proceeding with Sizewell C was necessary to maintain progress towards its energy objectives, the absence of a broader and more competitive market meant that taxpayers and consumers had to accept greater development and construction risk if it were to attract private investors.44
14We also asked the Department whether alternative technologies could have provided additional flexibility or choice.
Concluded (the committee's words)
We also asked the Department whether alternative technologies could have provided additional flexibility or choice. These included small modular reactors (SMRs) and next-generation designs such as EPR2.45 For example, in response to our queries on SMRs, the Department made clear that they see both Sizewell and SMRs playing a role in the future.46 The Department was keen to emphasise that “part of the benefit of Sizewell is the replication of the supply chain, the design and the skills that were used in Hinkley.”47 While we recognise that these technologies may not have been at the same level of maturity or readiness as Sizewell C at the point of decision, their existence highlights that the Department’s options are not limited to a single pathway in the longer term. For instance, the Department highlighted that there was no option of an EPR2 on the table in 2025, but did not rule out using EPR2 in the future.48 For all nuclear plants in the future, large or small, government should carefully evaluate how these are built and financed around the world rather than rely on one supplier. Balance of public risk and private reward
15The Department told us to us that the financing model was designed to attract private...
Concluded (the committee's words)
The Department told us to us that the financing model was designed to attract private investment, stating that it believed it had the “commercial incentives in the right place”.49 This was done by the government providing a structure in which many of the risks of running a business are shared with consumers and have limits on how much investors can gain or lose. This sharing of risk with consumers means that as project costs increase from the lower regulatory threshold to the higher regulatory threshold, private investors will only have to provide an additional £30 million while consumers will pay an additional £9.8 billion during the construction period and an additional £12 billion over Sizewell C’s 60-year operating life in 43 Q 20 44 C&AG’s Report, paras 5, 10 45 Qq 10, 22-24 46 Q 10 47 Q 22 48 Qq 22-24 49 Q 28 16 real terms. This is because the consumers will pay not only for the increased construction costs, but also for the cost of the additional borrowing and payments to shareholders over a longer period.50
16The Department has also provided contractual commitments that further limit risks to private investors of...
Concluded (the committee's words)
The Department has also provided contractual commitments that further limit risks to private investors of cost overruns and some unlikely but high impact risks. For example, a government loan facility of up to £8 billion in case of liquidity difficulties and a discontinuation and compensation agreement that would provide up to £70 billion from government if the project is closed or the facility is permanently shut down and Sizewell C Ltd is not at fault.51
17These structures mean that despite the public sector carrying the majority of the risks, the...
Concluded (the committee's words)
These structures mean that despite the public sector carrying the majority of the risks, the private sector investors annual returns are expected to be 12% to 13% if costs are low which only drops to 10.8% to 11.4% if the costs 50 C&AG’s Report, para 2.2, Figure 7 and Figure 11 51 C&AG’s report, paras 2.2 and 2.15. Values stated are nominal values. 17 overrun to the higher regulatory threshold.52 Under the regulated asset base model, cost overruns above the lower threshold are shared equally between investors and consumers, and investors’ primary penalty is a reduction in their rate of return of 1.6 percentage points. Although investors may receive lower returns if delivery performance deteriorates, they can still expect returns comparable to other utility investments even where costs approach the higher regulatory threshold.53
18The NAO concluded that it is “not clear” whether this structure sufficiently incentivises investors to...
Concluded (the committee's words)
The NAO concluded that it is “not clear” whether this structure sufficiently incentivises investors to keep construction costs well below this level, particularly given that their greatest financial exposure arises only in extreme, less likely scenarios. The NAO report makes clear that investors see themselves most exposed to ‘tail-end’ scenarios above the higher regulatory threshold where Sizewell C has to apply to the Secretary of State for a decision over the project’s future.54 The Department supported this by telling us that “there will be strong incentives on [private investors] to invest above the higher regulatory threshold” including “very bad dilution”.55 The Department’s analysis, which assumes that a fully public project would be delivered at the higher regulatory threshold, shows the private investors need to deliver £4 billion worth construction cost savings and reduce delivery time by two years to justify the cost to consumers of investor returns.56 Given their weak incentives, whether the investors will deliver these benefits through their involvement on the Board is uncertain and cheaper ways to improve project management may have been available.57
19We have previously stated that “Not all risks can or should be transferred to the...
Concluded (the committee's words)
We have previously stated that “Not all risks can or should be transferred to the private sector because the cost of inappropriate transfer of certain project risks to the private sector could be disproportionately high”.58 The Department told us the Sizewell C decision was the right one, achieving the private investment the government wanted at the end of a competitive process, and using the options available at the time.59 In signing the deal the government demonstrated that it found the cost of private investment to be acceptable, especially compared to a lengthy reset of the project.60 But it is an important rule of finance that financial returns should be in proportion to the risk. NAO analysis suggested that investor returns still appear to 52 Q 45 53 C&AG’s Report, paras 9, 19, 2.29 54 C&AG’s Report, paras 19, 2.25 55 Qq 29-30 56 C&AG’s report, para 17 , 2.11 and 2.12 57 C&AG’s Report, para 2.11 and 2.12 58 Committee of Public Accounts, Government’s use of private finance for infrastructure, HC 821, Thirty-Ninth Report of Session 2024–25, July 2025, para 22. 59 Qq 23, 24, 47 60 C&AG’s Report, paras 12 and 17 18 include a ‘nuclear premium’ despite the sharing of risk with consumers and taxpayers.61 It should therefore be the aim of government to ensure that the nuclear premium currently required by investors will reduce to zero and in future their returns purely reflect the risk they bear.
20The results of market processes inevitably reflected existing conditions, including investor views of the project...
Concluded (the committee's words)
The results of market processes inevitably reflected existing conditions, including investor views of the project as an investment proposition. The Department provided many examples of where in its view the market would not support stronger terms for government.62 This raises the question of why the market has so poor a view of government’s chances of successfully delivering steady returns in nuclear projects without these protections.
21We have previously drawn together lessons for successful use of private finance in infrastructure.
Concluded (the committee's words)
We have previously drawn together lessons for successful use of private finance in infrastructure. These include developing an investor-focused pipeline, including ‘investable models’, in order to help improve long- term planning for investors and make projects attractive to a wider pool of capital, driving down prices.63 We concluded that the lack of detailed information about when projects will be delivered and lack of analysis of past performance further reduced the value of past infrastructure pipeline information.64
22Important conditions were not in place for investment in Sizewell C.
Concluded (the committee's words)
Important conditions were not in place for investment in Sizewell C. The financing and delivery model is novel, with significant changes in risk allocation from Hinkley Point C’s deal.65 The Sizewell C deal was signed nearly 10 years after Hinkley Point C’s deal, after a number of delays.66 The story of past performance is that the UK has still not successfully completed construction of a new nuclear power station since the 1990s.67 When we asked about future nuclear investment, the Department was careful not to make commitments although describing themselves as “enthusiasts about SMRs and other models”.68 61 C&AG’s Report, para 2.29 and Figure 12 62 Qq 20, 21, 29, 31, 32, 47, 50 63 PAC, Government’s use of private finance for infrastructure, July 2025, paras 8 and 9 64 PAC, Government’s use of private finance for infrastructure, July 2025, para 1 65 Q 20; C&AG’s Report, para 2.2 66 C&AG’s Report, para 1.7 and Figures 1 and 2. 67 C&AG’s Report, para 2 68 Qq 10, 36, 84 19 20 2 Delivering Sizewell C Delivering a UK legacy from Sizewell C
23Expenditure of this quantum should be expected to leave a significant legacy for the UK,...
Concluded (the committee's words)
Expenditure of this quantum should be expected to leave a significant legacy for the UK, with much of that legacy in East Anglia. This will include but not be limited to housing,69 schools and other educational institutions70 and health facilities.71 Through its work with Sizewell C and other partners, the National Skills Academy for Nuclear should boost skills in nuclear constructions and decommissioning.72 There will also be opportunities to provide expertise to the private sector, and spawn new nuclear businesses and export opportunities as has happened in the United Arab Emirates.73
24Nuclear is a priority area for the UK’s High Value Manufacturing Catapult.74 Nuclear equipment and...
Concluded (the committee's words)
Nuclear is a priority area for the UK’s High Value Manufacturing Catapult.74 Nuclear equipment and related services are expected to make up around one-fifth of the cost of building Sizewell C, and more if sunk costs are excluded. EDF will supply major components for Sizewell C through its French subsidiaries such as reactors from Framatome and turbines from Arabelle, alongside nuclear engineering services provided by EDF EPR Engineering UK.75 This means that, while the project will deliver significant activity within the UK, a substantial proportion of high-value equipment and expertise is sourced internationally. Nonetheless, we heard about Sizewell C’s ambitions to “expand the skillset in the UK and to expand the supply chain so that it can serve others.”76 69 BBC, The Sizewell C grants worth thousands to homeowners - BBC News, 19 January 2026; Construction Enquirer, McLaren to build 2,400-bed worker campus at Sizewell C | Construction Enquirer News, 19 May 2025 70 Supply Chain sustainability school, Building for the future: Sizewell C accelerates supply chain upskilling - Supply Chain Sustainability School, 23 April 2026; Sizewell C, Sizewell C announces location for new post-16 college in Suffolk - Sizewell C, 23 July 2025; University of Liverpool, University partnership with Sizewell C continues to strengthen | Stories | Management School | University of Liverpool, 25 November 2025. 71 Sizewell C: Aiming for world-class wellbeing support | East Anglian Daily Times, 5 February 2025 72 Suffolk Chamber supply chain engagement, The National Skills Academy (NSAN) - Suffolk Chamber Supply Chain Engagement 73 ENEC, Emirates Nuclear Energy Company launches ENEC Consulting to support new civil nuclear energy projects globally, 15 January 2025; Gulf Business, ENEC, Westinghouse ink MoU to accelerate nuclear energy deployment in US, 26 July 2025. 74 High Value Manufacturing Catapult website, page on Clean energy transition 75 C&AGs Report, para 1.12, Figure 5 76 Q 70 21
25We heard from the Department that it believes its investment in Sizewell C will deliver...
Concluded (the committee's words)
We heard from the Department that it believes its investment in Sizewell C will deliver significant economic benefits for the UK.77 Sizewell C Ltd has set a target for 70% of construction spend to benefit British businesses.78 This spending is expected to support a peak direct workforce of around 8,000 including 1,500 apprenticeships79 and support a total of 70,000 jobs both directly and across the supply chain.80 We were concerned about the quality of these apprenticeships and Sizewell C clarified they wanted to create highly qualified people, saying they “do not just want bus drivers and cooks. [They] want fully qualified electricians.”81 Sizewell C Ltd stated that it has already committed £1 billion to the local and regional Suffolk supply chain and expects this to reach £4 billion.82 In writing to the Committee Sizewell C highlighted that it has also already committed £5 billion in contracts to more than 1,000 UK suppliers. Sizewell C also stated that 77% of the steel used in the project by weight will be sourced from the UK.83 Independent analysis by Oxford Economics suggests that construction could support £26.6 billion in gross value added across the UK economy, with around one third of this impact felt outside the East of England. Oxford Economics recognises that the overall impact of Sizewell C depends on the balance between the knock-on effects circulating within the UK economy, and ‘leakage’ as UK firms chose to import goods and services.84
26We were pleased to hear that Sizewell C Ltd is working with Sheffield Forgemasters to...
Concluded (the committee's words)
We were pleased to hear that Sizewell C Ltd is working with Sheffield Forgemasters to help them qualify to produce nuclear components, which will help them to compete for work on future projects.85 Similarly to Sizewell C, Rolls Royce’s SMR programme has an ambition for 70% of the SMR fleet’s value to be supplied by the UK.86 Rolls Royce SMR has announced that key steam turbine components will be manufactured in the UK, while also appointing strategic suppliers that suggest key nuclear island components will be manufactured abroad.87 This needs to be kept under close review by government, so it can act to facilitate the maximum value of supply from UK manufacturers for this programme. 77 Q 11; Oxford Economics, The Economic Impact of Sizewell C, December 2025. 78 Q 14 79 C&AG’s Report, para 3.12 80 A New Nuclear Power Station for Britain - Sizewell C 81 Q 15 82 Q 14 83 Letter from the CEO at Sizewell C, 3 July 2026 84 Oxford Economics, The Economic impact of Sizewell C, December 2025 85 Q 14 86 UK SMR programme at Wylfa hitting target for British contracts - GOV.UK, Great British Energy – Nuclear press release, 24 June 2026 87 Q 12; Rolls-Royce SMR Partners with leading global suppliers of key nuclear island components | Rolls-Royce SMR, 27 May 2026; Steam turbine components for Rolls-Royce SMR to be manufactured in the UK | Rolls-Royce SMR, 3 September 2026 22
27The previous Public Accounts Committee observed in 2024 that departments can miss opportunities for how...
Concluded (the committee's words)
The previous Public Accounts Committee observed in 2024 that departments can miss opportunities for how projects can add value over the long term and that bringing together multiple departments and stakeholders to deliver value does not come naturally to government departments.88 In the local area, Sizewell C has undertaken several projects which aim to have a positive impact on the local community as well as supporting delivery of Sizewell C. These include creating a new education campus and post-16 college,89 improving the local road network,90 and funding rail projects.91 For example, in written evidence provided after our evidence session Sizewell C Ltd highlighted it has established working relationships with local schools to raise aspirations and educational attainment for local students, including Alde Valley Academy secondary school in Leiston, and its feeder primary schools.92 Site culture
28This Committee has previously identified weaknesses in organisational culture across parts of the nuclear sector,...
Concluded (the committee's words)
This Committee has previously identified weaknesses in organisational culture across parts of the nuclear sector, including instances of poor behaviour and failures to create environments in which staff feel able to raise concerns. We reported that organisations such as the Nuclear Decommissioning Authority and Sellafield have in place channels for people to raise concerns including informal discussions before work and a group-wide anonymous phone service, but still had more to do to build a culture where employees could report poor behaviour safely, although improvements were underway.93 More recent evidence reinforces these concerns. In July 2025, there were reports in the media of unofficial strikes at Hinkley Point C linked to allegations of bullying by senior staff.94
29The NAO reported that Sizewell C has put in place a workforce code of conduct...
Concluded (the committee's words)
The NAO reported that Sizewell C has put in place a workforce code of conduct and whistleblowing arrangements that apply across both contractors and direct employees.95 We questioned Sizewell C on “how [they] will ensure that the workplace culture does not suffer from the same bullying and workplace safety concerns that have been alleged at other sites including Hinkley Point C”. Sizewell C’s Chief Executive stressed 88 Committee of Public Accounts, Delivering value from government investment in major projects, HC 456, 15 May 2024. 89 Sizewell C, Sizewell C announces location for new post-16 college in Suffolk - Sizewell C 90 Sizewell C, Setting out the road ahead: Sizewell C awards UK contracts for new roads and infrastructure upgrades - Sizewell C 91 Network Rail, Sizewell Rail Programme - Network Rail 92 Letter from the CEO at Sizewell C, 3 July 2026 93 Committee of Public Accounts, Decommissioning Sellafield, HC 363, 15 May 2025 94 Construction news, Workers stage unofficial strike at Hinkley Point C after alleged bullying | Construction News, 17 July 2025; New Civil Engineering, Wildcat strike at Hinkley Point C over ‘bullying’ by management | New Civil Engineer, 15 July 2025 95 C&AG’s Report, para 3.15 23 to us the importance of displaying the values to be expected from the leadership of the company, and particularly highlighted the importance of respect being “very much at the heart of what we do”. He said that at Sizewell C they made sure everyone is ‘represented’, had pastoral care and healthcare on site, a robust induction and workers’ charter, and that they had a very close relationship with the trade unions. He also described further measures, including regular worker surveys, active monitoring of whistleblowing arrangements by the audit committee, and the use of independent investigations to examine reported concerns.96 Decommissioning Sizewell C
30Decommissioning nuclear power stations has historically proven more costly and taken longer than expected, leading...
Concluded (the committee's words)
Decommissioning nuclear power stations has historically proven more costly and taken longer than expected, leading to the UK taxpayer picking up the additional costs.97 Sizewell C Ltd and the Department have undertaken analysis and assurance of the required cost to decommission Sizewell C. The funding agreed to cover these costs are estimated at the P80 (i.e. 80% of the time the costs will fall at or below this threshold) with an additional 25% contingency.98
31Sizewell C Ltd will set aside money over the course of its operational lifetime to...
Concluded (the committee's words)
Sizewell C Ltd will set aside money over the course of its operational lifetime to cover these decommissioning costs. It will do so through using a proportion of the Allowed Revenue, as regulated by Ofgem, and thereby charge consumers. This money will be put into the Funded Decommissioning Programme fund, an independently run investment fund which will aim to accumulate value over the course of Sizewell C’s operational lifetime.99 Sizewell C is expected to invest between £5.1 billion and £5.8 billion nominal into this fund (£2.3 billion and £2.5 billion in 2024–25 real terms)100 with the rest of the estimated £12 billion (2022 real terms) of decommissioning costs coming from the accumulation of the invested funds.101
32There are three risks which could lead to a shortfall in the funding for decommissioning.
Concluded (the committee's words)
There are three risks which could lead to a shortfall in the funding for decommissioning. These are: that Sizewell C does not operate long enough to invest the expected amount of money into the fund; that the funds invested do not grow at a sufficient rate to meet the target amount; or that the target proves to have been set too low as costs were underestimated. If an actual or projected shortfall emerges while Sizewell C is still operating, 96 Q 73 97 Committee of Public Accounts, Decommissioning Sellafield, HC 363, 4 June 2025 98 Page 4, Funding Arrangements Plan, Department for Energy Security and Net Zero, 22 July 2025 99 Funding Arrangements Plan, Department for Energy Security and Net Zero, 22 July 2025 100 C&AG’s report, figure 7 101 Written Statement HCWS893, Departmental Contingent Liability Notification; Sizewell C Funded Decommissioning Programme and Government Support Package, 1 September 2025 24 then payments from consumers would be increased to deal with the shortfall. If this is not possible because Sizewell C is no longer operating, then public funds would be used.102 102 Written Statement HCWS893, Departmental Contingent Liability Notification; Sizewell C Funded Decommissioning Programme and Government Support Package, 1 September 2025 25
Evidence
Oral evidence sessions 1
- 8 Jun 20265 witnesses, listed belowparliament.uk ↗
Who gave evidence 5 witnesses
- Caroline BotwoodDirector, Nuclear Projects Delivery, Department for Energy Security and Net Zero
- Clive MaxwellSecond Permanent Secretary, Department for Energy Security and Net Zero
- Jonathan BrearleyPermanent Secretary, Department for Energy Security and Net Zero
- Joseph RipponDeputy Treasury Director, Sizewell C
- Nigel CannManaging Director, Sizewell C
Correspondence 3 letters
- 3 Sep 2026Letter from the Permanent Secretary at the Department for Energy Security and Net Zero relating to Sizewell C Parliamentary reporting, dated 24 July 2026To committee
- 13 Jul 2026Letter from the CEO at Sizewell C relating to a follow-up on the Sizewell C project, 3 July 2026To committee
- 29 Jun 2026Letter from the Permanent Secretary at the Department for Energy Security and Net Zero relating to Sizewell C oral hearing – follow-up note, 22 June 2026To committee