SUFFOLK — The National Audit Office warned that the UK government's £38bn Sizewell C nuclear plant in Suffolk faces immediate and substantial financial risks that may outweigh benefits for households until at least 2064. The watchdog said the project's costs are subject to uncertainty, and that although potential benefits are considerable, they remain uncertain.

The risks are "immediate, substantial and borne by the public," the NAO said. The watchdog urged the government to mitigate the risk by using "close monitoring, greater transparency to parliament, and by securing value for money from the significant public and private investment."

The government claims the reactor will generate the equivalent of enough low-carbon electricity to power 6m homes when it begins operations in the late 2030s, and could save £2bn a year from the electricity system compared with using other low-carbon technologies. For households, the overall savings could be outstripped by the cost of supporting construction until almost halfway through the plant's 60-year operational life. The project could take even longer to break even if there are cost overruns or delays.

Households began paying for Sizewell C via home energy bills at the start of the year to help fund construction. The project's financial framework is a regulated asset base model, a change from the Hinkley Point deal, which will earn a guaranteed stream of revenues from home energy bills only once it begins generating in the early 2030s.

Sizewell C is being developed by French state nuclear company EDF as a successor to the Hinkley Point C reactor in Somerset, the first nuclear plant to be built in the UK in a decade. The UK government has invested £14.2bn as the majority stakeholder, while EDF has invested £1.1bn for a 12.5% stake. The Canadian pension fund La Caisse owns 20%, British Gas's parent company Centrica owns 15%, and the investment fund Amber Infrastructure owns 7.6%. Sizewell C said it had so far sourced 70% of its construction value from UK suppliers and had spent just under £5bn.

"The cost on household bills is an investment in lower long-term electricity costs which will deliver value to consumers and to the country for the rest of this century," Sizewell C chief executive Nigel Cann said. "All major infrastructure projects involve uncertainty, and the report highlights the steps we're taking to reduce risk and control costs," he added.

Stop Sizewell C warned that any construction delays could mean that bill payers support the project without receiving power for longer than expected, while the government would be on the hook for the financial risk. "The risks surrounding the project could easily turn Sizewell C into a financial disaster," the group said. "The only ones who can't lose are the investors."