New Nuclear


Building a new generation of nuclear power stations

Julia Pyke

Julia Pyke is Director of Financing for Sizewell C, working with Government to identify an innovative way for Sizewell C to be funded at best value to electricity consumers, and also with potential investors and lenders to raise the capital required. Prior to her move to Sizewell C, Julia was Head of Power and Renewables for UK, US & Europe at Herbert Smith Freehills LLP. At HSF, she led a cross-practice team advising on nuclear, wind, biomass and tidal projects.


  • Physical and economic flexibility are key characteristics for power producers
  • The heat produced in nuclear power stations can be utilised for a range of purposes
  • Using the same technologies and design can significantly reduce the cost of a new station
  • The Regulated Asset Base model can reduce the cost of production
  • When operational, the new Sizewell station will reduce costs for the consumer.

In talking about the future of nuclear in the UK, it is important to recognise that the future of the energy system is going to be predominantly intermittent and provided by renewables. So, what is the appetite for more gigawatt nuclear – providing baseload power – in an increasingly intermittent system? Early thinking about Sizewell included ways to make it economically flexible. Economic flexibility, allied to physical flexibility, has led us to the concept of an ‘availability payment’. Hinkley Point C will be paid a fixed amount for putting electricity into the grid. It will not, however, be paid the same amount for, for example, using that power for hydrogen electrolysis – and this makes it economically inflexible.

In contrast, an availability payment would mean that Sizewell C will not be paid for putting megawatt hours onto the grid. It will, course, do so – up to 100% if that is what the system wants at any point in its operating lifetime – but it will be configured so that it can also put its electricity into non-grid uses. So it will be able to send its electricity, for example, to hydrogen electrolysis. Continuous power for electrolysers, alongside intermittent from renewables, increases efficiency – which is good for everybody. It also provides a use for the power when the national grid does not require that quantity of power from Sizewell. Over the 60-plus year timeline for Sizewell C operation, this sort of flexibility is important.

Using the heat produced

A nuclear power station is a huge heat machine. The UK has habitually solely made electricity from this heat machine. That is not how nuclear stations have been used in other countries such as Sweden, Russia or China, where nuclear has been – or is – also used for district heating. At Sizewell, therefore, valves will be installed to

take out steam at around 270˚C before it hits the turbine. That will allow us to extract around 400MWth without significantly impacting electrical output and without other changes to the design. That heat is very cheap. Obviously, there is the cost of the valves and the cost of taking the heat to where it is needed. Yet in a world in which cheap low carbon heat is at a premium, this would provide a very useful service.

Indeed, we are looking at a variety of applications for the plant. We are looking at heat-assisted electrolysis for hydrogen to make it cheaper. Sizewell is part of the Felixstowe Freeport East initiative, precisely because of its ability to provide clean heat and power – and hydrogen. Ports have a need for hydrogen at scale because port vehicles are often hydrogen-powered.

Another application for Sizewell energy is heat-powered desalination. Suffolk has had a very arid past year, which creates a huge issue for farmers. Using our heat output to achieve more economic desalination or other water treatment would address that issue.

We are also being funded by BEIS to develop a novel heat-powered direct air capture prototype. The prototype is being developed with Nottingham University, Strata, Atkins and Babcock. So it is a UK-developed prototype. Because it is based on heat convection, it uses almost no electricity and our 400MWth of heat is cheap. Indeed, the process is about half the cost of existing electricity-driven alternatives.

Reaching new investors

Many potential investors within in the financial community have never invested in nuclear, but we are confident we will achieve an indicative investment grade rating for the debt, which means we will be able to raise the sums needed – in the order of £20 billion with all these new technologies and applications.

Sizewell will effectively be a second Hinkley Point. The above ground design is an exact replica. We have also agreed with Government to use the Hinkley key supply chain. It is critical to use the same key supply chain because just as we have learned, so have they. Indeed, 90% of the content of Sizewell lifetime spend will be UK supplied, which is a very impressive figure.

The Development Consent Order was issued in July. The Government has also approved the Regulated Asset Base funding model. In addition, it will take a special share in all future nuclear projects to address security concerns about nuclear power station ownership.

A big difference between gas generation and a large nuclear power station is that the latter provides energy security. As part of that, Sizewell will use fuel made in the UK. We are also looking to explore the re-enrichment of existing UK uranium stocks, which would give us close to a 100% UK supply chain as well as energy security. In addition, the electricity produced is not weather dependent.

The costs of nuclear

We are often asked why nuclear is so expensive compared to wind? Well, wind power is performing a different function in the system. We are also asked how the strike price of £92.50 was arrived at? Well, £11-13 is the cost of construction. The cost of operation, including fuel and decommissioning, is around £20. The rest of the money? I started advising on this project in 2006. On the Contract for Difference model, EDF will not receive a penny until the station turns on in 2027. That represents an enormous credit card bill, some 21 years of interest on the considerable quantities of money that EDF has been spending on this power station.

Looking at Sizewell, there is an imperative to build it more cheaply. The capital cost can be reduced by using the same design again and the same supply chain. To supply safety-critical equipment into a nuclear power station, there is a very lengthy process to prove to the Office of Nuclear Regulation that the equipment can perform under high-stress circumstances. This entails a high cost to qualify the supplier but this does not need to be repeated for Sizewell C where we have the same supply chain building to the same design.

While the capital costs will be lower, the vast majority of the cost is the cost of the money. This will be lower under a Regulated Asset Base model, the model that is used for the electricity transmission system, for the water industry, the airports, etc. First, interest is not rolled up: lenders will be paid interest on their debt through construction, and the equity will receive a small return through construction.

The cost per household will be around £1 per month at the height of construction. When operational, our modelling (which uses the same basis as BEIS modelling) predicts household savings of £30-50 pounds per year. Nuclear is expensive to build as a unit item, because 7% of the nation's electricity is being constructed in two fields. But household bills will go down. This is very little understood.

Sizewell C is going to be British. We hope it will be predominantly owned by British pension funds and partly by the UK Government. EDF plans only to retain a 20% stake. In many ways, this represents an effective re-invention of UK nuclear energy capability.