Committee publication · Correspondence · 29 June 2026
Letter from the Permanent Secretary at the Department for Energy Security and Net Zero relating to Sizewell C oral hearing – follow-up note, 22 June 2026
From: Public Accounts Committee
Inquiry: Sizewell C
Summary
Jonathan Brearley, Permanent Secretary at the Department for Energy Security and Net Zero, provides follow-up evidence to the Public Accounts Committee on Sizewell C nuclear project governance. The letter details government oversight mechanisms (including shareholder veto rights and quarterly liaison committee reporting), investor cost-control incentives (including return caps and penalties for delays), decommissioning funding arrangements, and economic benefits (£4.4bn investment, 9,000 jobs during construction). It confirms the department is considering the committee's request for six-monthly parliamentary reporting.
Key findings
- Government holds veto rights through the Enduring Shareholders Agreement and receives quarterly project updates via a Liaison Committee with Ofgem, the Independent Technical Advisor, and Sizewell C Ltd; reporting escalates to monthly if costs breach the Lower Regulatory Threshold.
- Investors face tiered incentives: 50/50 cost savings below Lower Regulatory Threshold; 6% annual return cap pre-operation (falling to 2% for delays exceeding 3 years); permanent 1% reduction in cost-of-capital baseline for delays exceeding 4 years; and forced equity dilution if additional taxpayer funding is required above Higher Regulatory Threshold.
- Decommissioning costs will be funded through consumer contributions via the Regulated Asset Base licence, updated quinquennially; only in 'highly remote' scenarios (e.g. plant early closure, cost inflation during decommissioning) would taxpayers fund shortfalls.
- Sizewell C is forecast to deliver £4.4bn investment in the East of England, 9,000 jobs during construction, and £250mn for community initiatives in Suffolk; 70% of construction spend is directed to British businesses.
- Great British Energy-Nuclear SMR programme at Wylfa (Anglesey) targets 1.5GW capacity mid-2030s; to date 95% of £850mn-plus contracts awarded to British firms, with ambition for 70% UK supply-chain content across SMR fleet.
Tone
ProceduralTopics
Key actors
Jonathan Brearley, Department for Energy Security and Net Zero, Public Accounts Committee, Sizewell C Ltd, Ofgem, Independent Technical Advisor, Rolls-Royce, Great British Energy-Nuclear
Notable line
“At every stage, Government retains control, and investors continue to face real financial downside - including dilution of returns and reduced upside if costs increase or delivery is delayed.”
Key Quotes
“At every stage, Government retains control, and investors continue to face real financial downside - including dilution of returns and reduced upside if costs increase or delivery is delayed.”
“If the project is delivered below the LRT, investors share 50/50 in the savings. If costs rise or the project is delayed beyond the LRT, their returns reduce.”
“There is a highly remote scenario in which Government would have to fund a shortfall, such as, an increase of costs during the decommissioning phase or plant early closure when the Economic Licence has been revoked …”
“The project is expected to deliver significant benefits to the local area, including £4.4 billion of investment in the East of England and £250 million to support community initiatives in Suffolk during construction.”
“GBE-N's ambition is that 70% of supply chain products are British built across the SMR fleet, including both on-site and off-site activity .”
Source · parliament.uk record ↗