'Embrace what's in front of you' – Sizewell C legal chief on delivering next-gen nuclear power

How has the new UK Government's renewed commitment to nuclear energy been received?

It's been welcome that the government is talking positively about nuclear. The Prime Minister's pledge at COP29 was to reduce UK emissions by 81% compared with 1990 levels by 2035. The government confirmed in its budget, that nuclear is part of a strategy to achieve energy security and clean power. Of course, one of the projects pending a final investment decision is Sizewell C. The government’s stated plan is to make that decision in the spring 2025 spending review, so we hope to have positive news soon.

The government also confirmed it's down to four bidders in its SMR technology competition. That will be an exciting part of the UK nuclear industry. Having confidence that top-down policy supports projects is critical for attracting private investment.

What are the main challenges in delivering a large nuclear power project?

Committing to fleets and a forward plan is important, but it doesn't have to be one technology type, it can be a mix of European pressurised reactors [EPRs] and small modular reactors [SMRs], for example. But what is true is with each unit you build there are clear learnings about how to do it. That reduces construction and delivery risk and creates cost savings. That's been the case with unit one and unit two at Hinkley and we have predictions for Sizewell at where that might go for its unit three and unit four phases.

At a working level, there is a challenge around the multiple regulatory interfaces these projects have. UK nuclear projects have key regulators in the form of the Office for Nuclear Regulation, the Environmental Agency and, of course, Ofgem in the context of Sizewell with our planned regulated asset base model. The developer organisation must maintain good working relationships with each and ensure it is able to meet its regulatory compliance requirements. Streamlining that compliance and reporting helps mitigate cost and complexity in the developer organisation. It's also important how the regulators interact with one another – you don't want a decision from one impacting how you engage with another. At Sizewell we're looking at that through inter-regulatory working groups.

Where can government help industry deliver projects?

At a macro-level the time it takes to make decisions and then achieve a final outcome. For example, on Sizewell C, the first public consultation for our Development Consent Order took place in November 2012. The Development Consent Order was granted in 2022 before in May 2024 the Supreme Court refused permission to appeal. With multiple regulators taking decisions around these large projects, the time to get the project to development and into operation drives cost and risk. Streamlining that where possible is a key role for government.

There are also really specific technical points in the nuclear industry.  For example, export control regulations which deal with the movement of particular types of information and materials across borders. This was designed largely to physically transport bits of kit, rather than enable information flows as part of civil nuclear development. Licences typically have the physical destination for a transfer but we live in a digital era. Government could look at, for example, granting these licences for trusted countries or suppliers, simplifying administration of these nuclear projects.

How is the new regulated asset base model helping?

One of the big cost factors for these projects is financing construction. It's a long time before you start earning any revenue, eg, an EPR reactor, which has a multi-year construction programme. On Hinkley Point C, that's all funded by the shareholders and they won't earn revenue until it's switched on and can sell power into the market (this is when the CfD will apply from).

The RAB model provides a way of sharing that cost risk. So, from day one the investors in Sizewell receive a return on their investment. They still have upfront funding costs, but they are reduced as investors are paid through the life of the construction via consumers' bills. Meanwhile, the shareholders are incentivised to deliver the project on time and on budget as mechanisms within the RAB penalise you if this isn’t achieved.

Then, once you're in operation, there is a revenue allowance set by Ofgem every five years, as well as incentives to maximise profitability of trading (the benefits of which are then shared with the UK consumer). Going back to an earlier point, the inter-regulatory working arrangements between the ONR and Ofgem will be important for this, to ensure that regulatory requirements in the nuclear space are understood and accounted for in revenue setting. Overall, investors are well protected in a RAB model.

What lessons have you learnt from working on Sizewell C?

Firstly, it's the benefits of working in an experienced, multidisciplinary team. The project is complex - we're building a nuclear power station and privately financing it under a new (for nuclear) regulatory structure. One of the main things I've learnt is to embrace what’s in front of you and keep one eye on the horizon. Sizewell has grown significantly in my time there, and the experience of learning through that change has been both challenging and exciting. Working with my fantastic legal team, colleagues and external advisers has been great fun.

How would you assess the future of nuclear power in the UK?

From what the government and previous government have said, it sounds promising. The proof is whether they take these final investment decisions, not just for Sizewell but the SMR competition and potentially the future of advanced nuclear technology and fusion reactor funding decisions. Decisions need to be taken and taken quickly to give the industry confidence that it's all going to go ahead.

Abbie Pokorny is the Director of Legal Services at Sizewell C.