UK (Parliament Politics Magazine) – UK bill payers will face £2bn a year to fund EDF’s Hinkley and Sizewell projects, with subsidies and levies set to push energy costs higher for years.
As reported by the Guardian, new government figures reveal UK bill payers will contribute £2bn annually to EDF, which is constructing the Hinkley Point C and Sizewell C nuclear plants.
How will new nuclear payments shape Britain’s future power costs?
EDF, the French state-owned energy giant, is set to receive £1bn a year once Hinkley Point C begins generating electricity in 2030. Under the contracts-for-difference scheme, low-carbon energy firms are guaranteed a fixed rate for the electricity they generate.
Britons will also face a £1bn levy to support Sizewell C, a 3.2GW project run by EDF in Suffolk. Energy bills will rise by nearly £2bn to cover two EDF plants, which will supply electricity to around six million homes at peak demand.
A government spokesperson said,
“We are reversing a legacy of no new nuclear power being delivered to unlock a golden age of nuclear, securing thousands of good, skilled jobs and billions in investment.”
The government expects higher costs of new nuclear plants could be offset long-term by a stable supply, reducing the need to balance variable solar and wind output. This year, managing balance in the energy system could cost £2bn, says the Nuclear Industry Association.
Officials claim Sizewell C could save £2bn annually, though construction may add about £1 per household each month.
Chancellor Rachel Reeves also pledges to cut household energy bills by around £150 from April by reducing green levies.
EDF’s subsidy was secured under a 2013 deal with the Conservative-Liberal Democrat coalition.
Ed Davey, then energy secretary and now Lib Dem leader, guaranteed EDF £92.50 per MWh for electricity from its 3.2 GW plant.
According to the Daily Telegraph, the Hinkley strike price has risen to £133 and is expected to reach £150 by 2030 due to inflation.
The wholesale electricity price stands around £80/MWh, letting EDF recover the shortfall from consumers and businesses under its CfD deal.
Government insiders said Hinkley Point C could have saved over £4bn if it had been generating power during the post-Ukraine price surge.
Sizewell C, still under construction and projected to be completed in the 2030s, will add to household energy bills.
Energy bills will increase by £10 from January due to a levy supporting Sizewell C, expected to raise £700m and double to fund the £100bn project by 2030.
Hinkley Point C, initially estimated at £18bn, has faced delays and cost overruns, with EDF warning the final bill could reach £46bn.
What did the OBR reveal about EDF’s Hinkley Point C subsidy?
The Office for Budget Responsibility released documents outlining its findings on nuclear subsidies and their impact on the economy. EDF is expected to receive £1bn in Hinkley Point C’s first operational year, planned for 2030 after 12 years of construction, the OBR reports.
It added,
“In 2030-31, contracts for difference (CfDs) are expected to generate £4.6bn in government receipts, including £1bn to fund subsidy payments to the Hinkley Point C nuclear power plant for its first year of expected generation.”
How did Keir Starmer and Rachel Reeves frame the Sizewell C nuclear project?
Prime Minister Keir Starmer said,
“I’ve been clear there will be no more dithering and delay on Sizewell C – and this investment takes us a step closer to the benefits it will bring to the British people.”
He added,
“Lower energy bills, thousands more jobs and apprenticeships, and better energy security – this is not only a vote of confidence in the UK as an investment destination, it is our Plan for Change in action.”
Rachel Reeves stated,
“This investment goes hand in hand with the £14.2 billion set aside at last month’s Spending Review to deliver the biggest nuclear building programme in a generation.”
She continued,
“It is part of the new confidence we’re seeing in the UK as an investment destination and will create thousands of high-skilled, high-paid jobs to help deliver on our Plan for Change.”
When did Russia invade Ukraine?
Moscow launched a large-scale military invasion of Ukraine on February 24, 2022. The 2022 invasion was a major escalation of a conflict that started in February 2014.
Russia annexed Ukraine’s Crimea region and fomented a war in the eastern Donbas region using proxy forces, which had already resulted in thousands of deaths before 2022.
According to the UN Human Rights Monitoring Mission in Ukraine (HRMMU), there have been 53,006 verified civilian casualties from 2022 to 2025. This includes 14,534 killed and 38,472 injured, as of October 2025.