By Adam Clark

 

The British government has committed up to 1.7 billion pounds ($2.34 billion) in direct funding for a large-scale nuclear project amid heightened worries about the future and stability of the U.K.'s energy supply.

The funding was disclosed as part of the Budget presentation by U.K. Treasury chief Rishi Sunak on Wednesday. The British government said it remains in negotiations with Electricite de France SA over the planned Sizewell C nuclear plant in southern England. It said it aims to enable a final investment decision on a nuclear project during this parliament, subject to value for money and approvals.

The GBP20 billion Sizewell C project has been repeatedly delayed by concerns about financing and the involvement of Chinese state-owned company China General Nuclear Power Corp. On Tuesday, the U.K. government said it would adopt a new financing model to help pave the way for the project and other nuclear plants, allowing investors to receive returns before completion.

Concerns about the future of the U.K.'s energy supply have been highlighted by recent surging gas prices and temporarily low supply from wind projects, which have been central to the government's net-zero emissions by 2050 strategy.

Sizewell C and its sister project Hinkley Point are expected to provide around 14% of the U.K.'s current electricity needs but are unlikely to be operational for years. Currently around 16% of the U.K.'s electricity generation comes from nuclear power.

The U.K.'s Nuclear Industry Association on Wednesday welcomed the funding commitment, as well as confirmation of money for small and advanced modular reactors.

"We can't get to net zero without investing in new nuclear capacity, and this is a clear signal from government to investors that it sees nuclear as essential to our clean energy transition," NIA Chief Executive Tom Greatrex said.

 

Write to Adam Clark at adam.clark@wsj.com

 

(END) Dow Jones Newswires

October 27, 2021 13:15 ET (17:15 GMT)

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