By Muvija M and Susanna Twidale
LONDON (Reuters) -Britain will invest 700 million pounds ($809.13 million) in EDF's planned Sizewell C nuclear plant, outgoing Prime Minister Boris Johnson said on Thursday, announcing his last major policy move before he steps down from the role next week.
"Go nuclear and go large, go with Sizewell C," Johnson said, speaking at Sizewell in the eastern English country of Suffolk.
"We will get it over the line because it will be absolute madness not to," he said.
The investment in nuclear power comes as Britain strives to be more energy independent after a surge in oil and gas prices following the war in Ukraine that has left millions of households facing fuel poverty this winter, and as the country aims to reach net zero emissions by 2050.
Britain still needs to attract private investors for Sizewell C.
France's EDF has said the plant could cost 20% less than the cost of its Hinkley Point C plant in Britain, which is currently budgeted at 25-26 billion pounds($29.90 billion-$30 billion).
EDF plans to make a final investment decision on the project in 2023.
Ramping up nuclear energy production would in the longer term reduce Britain's reliance on natural gas, which made up around 45% of the country's electricity production last year.
The promised injection of state funding for Sizewell would come out of 1.7 billion pounds pledged by the government last year to help a new large-scale nuclear project get off the ground.
However, it would be years before the plant is operational. The Hinkley Point C nuclear plant has faced repeated delays and billions of pounds in cost overruns.
The Hinkley plant is currently expected to start in 2027, a decade later than originally promised.
EDF has said Sizewell C would benefit from being "a near replica" of the Hinkley C project.
China's CGN currently holds a 20% development stake in the project. Some British politicians have expressed concerns about China's involvement in the country's nuclear industry and the government has approved a regulated asset-based (RAB) funding model it hopes will entice different backers to the project.
NEAR-TERM COSTS TO CONSUMERS
Under the regulated-asset-base (RAB) model, companies building new plants would be paid during the construction phase, cutting down their development risk and allowing them to secure cheaper financing for the projects.
"Sizewell C would bring British power prices down after its commissioning in the mid-2030s, but during its estimated 10-year construction period, the project would cause consumer energy bills to rise, as under (RAB) some construction costs would be transferred to consumers," said Asgeir Heimisson, Senior Associate at Aurora Energy Research.
Critics of RAB say it will leave taxpayers liable for any cost over-runs and delays during construction.
Anti-nuclear environmental group Greenpeace criticised the investment.
“This money could insulate huge numbers of draughty homes, and cut next year’s bills, instead of being thrown onto the slow-burning financial bonfire that is EDF, to increase our bills for decades," said Greenpeace UK chief scientist Doug Parr.
Britain's Department for Business, Energy and Industrial Strategy did not immediately respond to a request for clarity over whether the 700 million investment would see the government taking a direct stake in the Sizewell project.
($1 = 0.8650 pounds)
(Reporting by Susanna Twidale and Muvija M in London, Editing by Susan Fenton and Frances Kerry)