The sheer scale of the Sizewell B nuclear power plant, sprawling along the Suffolk coastline, is a marvel to behold. Its white dome is bigger than that of St Paul’s Cathedral and can apparently withstand a plane flying into it, which is just as well because it contains the UK’s only pressurised water reactor, where atoms of uranium are split to create nuclear energy.
John, our photographer, and I are not allowed in; however, once we have passed the stringent security checks and been kitted out in safety coat and shoes, hard hat, earmuffs and goggles, we are permitted to enter the turbine hall.
Sprinting ahead, up the seemingly infinite flights of stairs to the top of the building is Chris O’Shea, 52, chief executive of Centrica, the parent company of British Gas.
He is as exuberantly bearded as an Edwardian dandy, though he says his facial hair role model is Ron Burgundy, the fictional 1970s newsreader played by Will Ferrell in the film Anchorman. He is also a marathon runner, which accounts for the rapid ascent of the steps.
O’Shea is an evangelist for nuclear power – something that has not always been the case with his predecessors in the chief executive’s office.
‘Ten years ago people thought nuclear was a dying technology, but there has been a renaissance,’ he says. In the summer, he announced that Centrica was taking a 15 per cent stake in the new Sizewell C plant being built next to the existing Sizewell B facility. The cost of the whole project is estimated at £40 billion.
Visionary: Sizewell C, in which Centrica, led by Chris O’Shea has bought a 15 per cent stake will be built next to the Sizewell B nuclear reactor
‘Sizewell C will probably run for 100 years,’ O’Shea says. ‘The person who will take the last electron it produces has probably not been born. We are very happy to be the UK’s largest strategic investor.’
This is a significant change from the stance taken by some previous Centrica bosses, who backed away from new nuclear projects because of the risks involved and the uncertainty of the returns.
Speaking of the position before he took over, O’Shea says: ‘We tried to sell our share of the nuclear power stations that we own today, but personally I didn’t understand it. I thought it was a flawed strategy.
‘I just thought: sustainable carbon-free electricity in a country that needs electricity – and we import 20 per cent of ours – why would we look to sell nuclear?’ Backing nuclear power is part of O’Shea’s wider strategy to invest in UK energy infrastructure.
He believes this will result in more stable revenues for the company and lower prices for customers, which would certainly be welcome in an energy market that has been subject to wild swings.
‘Over the past few years we have seen a lot of volatility in energy prices,’ he says. ‘The investments we are making are trying to reduce that volatility in energy prices on bills and on Centrica’s earnings.’
Centrica’s 500,000 shareholders include an army of private investors, many of whom came on board during the ‘Tell Sid’ privatisations of the 1980s and all of whom will be hoping he is right. What about the risks that deterred his predecessors? O’Shea argues he will achieve reliable returns thanks to a Government-backed financial model that enables the company to recover capital ploughed into Sizewell C and make a set return.
Nuclear power in general and the Sizewell C project in particular remain controversial, however.
Local campaign groups are trying to block construction, which they say will affect plant, bird and animal life, as well as questioning the claimed economic benefits.
Opponents, who have included actor Bill Nighy and artist Maggi Hambling, argue consumers will be on the hook for delays and cost-overruns.
And critics say that while major nuclear accidents are rare, when they do happen they are catastrophic: think Chernobyl or Fukushima. Then there is the problem of radioactive waste, which must be safely stored for hundreds of years afterwards.
Sizewell is just one in a programme of investments in UK energy infrastructure including liquefied natural gas (LNG), hydrogen storage and gas from the Irish Sea.
O’Shea’s boldness is an exception to the general atmosphere of timidity over investing in the UK.
When he took over as chief executive at the start of the pandemic in 2020, the business was ‘not in good shape financially or operationally’ he says, adding: ‘So a radical overhaul was required. Now we are in a good position to invest.’
Scrutiny: The Centrica boss is interviewed by Financial Mail’s Ruth Sunderland
Major moves include a £200 million stake in the LNG terminal at Isle of Grain in Kent.
The belief is that LNG, which produces significantly fewer greenhouse gas emissions than other fossil fuels and is easier and cheaper to transport and store, will be a major source of energy for the UK in the coming years.
O’Shea remains hopeful for plans to develop the Rough gas storage facility in the North Sea, which he re-opened in 2022.
The idea is that Centrica will invest £2 billion to ‘create the biggest gas storage facility in the world’, along with up to 5,000 jobs.
It could be used to store hydrogen, touted as a major energy source of the future, provided the Government comes up with a supportive regulatory framework as it has for Sizewell. He is also backing a £10 billion plan to build the UK’s first advanced modular reactors in a partnership with X-energy of the US.
The project is taking place in Hartlepool, in County Durham, where the existing nuclear power station is due to reach the end of its life in 2028.
As is the nature of these projects, it involves risks around technology, regulation and finance, though the potential rewards are significant. Among them is the prospect of 2,500 jobs in the town, where unemployment is high.
This matters to O’Shea, who spent his early childhood on a council estate in Glenrothes, Fife, and moved with his family to Glasgow when he was nine.
His career got off to a slow start when he struggled to secure a training contract with an accountancy firm after leaving Glasgow University.
‘I had about 30, 40 rejection letters. I remember the stress of not having a job when everyone else did – you just feel different,’ he says.
He feels it is ‘a duty’ for bosses to try to give young people a start.
‘We are committed to creating one new apprenticeship for every day of this decade,’ he points out, sounding genuinely proud.
There is a down-to-earth air about O’Shea, who has two daughters and a son.
He turned down six-figure bonuses in three of the years he has been chief executive in solidarity with customers – though he has accepted some large payouts. In the most recent financial year his total package was £4.3 million.
‘I think about the ability of people to pay their bills on a daily basis,’ he says.
Funding Sizewell C will cost the consumer about £1 a month on their home energy bill but in the long term it ‘could deliver savings of £2 billion a year across the British electricity system’ and reduce energy reliance on undemocratic regimes, as was the case with Russia before it invaded Ukraine. ‘I do worry about the ability of people to afford the basic essentials in life,’ O’Shea says.
‘Rent or mortgage, council tax, food, energy, water, transport – it is a real worry and something we as a country have to figure out how to solve.
‘My view is the way to do it is through economic growth.’
Centrica investors have seen their shares rise by more than 300 per cent since O’Shea took over.
The question now – and it is one for the whole country, not just for shareholders – is whether his investments in Britain will indeed result in lower energy costs and higher growth.
Each one of us has a big stake in the answer.
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