Hinkley Point C is £1.5bn over budget and a year behind schedule, EDF admits, Cost of controversial nuclear power plant in Somerset has risen to £20.3bn and delayed by 15 months, says French energy firm.
The UK’s first nuclear power station for more than two decades is at least £1.5bn over budget and could be completed 15 months behind schedule, its developer has admitted.
French state-owned EDF said the cost overrun for two new reactors at Hinkley in Somerset could hit £2.2bn, taking the total spend to £20.3bn, up from £18bn.
EDF confirmed the first reactor – originally due to become operational by the end of 2025 – risked being 15 months late and might not start generating electricity until 2027. The second unit is estimated to face a nine-month delay.
Experts said the UK faced significant challenges to electricity supply and the prospect of further delay at Hinkley meant ageing power stations may need to be kept open longer.
In a review of costs for Hinkley, EDF said £1.5bn of the increase was due to a “better understanding” of the construction work needed and UK regulatory requirements. The estimated delay on completing the reactors – which are meant to set a new standard for nuclear safety – would add a further £0.7bn in cost.
But the company insisted it was still aiming for a delivery date of the end of 2025, and said it was on track to pour the concrete for the first reactor in 2019.
“We are very clear that the team must remain mobilised on the initial objective of 2025,” said Vincent de Rivaz, chief executive of EDF Energy. “We have in our hands what we need to deliver [the project on time].”
De Rivaz told the House of Lords last year that the company had “dramatically” changed its approach for Hinkley, compared with Flamanville 3 in north-west France, which was originally due to be finished in 2012 but was not expected to be complete until late 2018.
The chief executive, who is stepping down in October, told the Guardian the very existence of this review was an example that lessons had been learned. Asked if he could guarantee that the UK taxpayer would not be on the hook if costs continued to escalate in the future, he said: “Absolutely. Definitely. Totally.”
In 2007, De Rivaz predicted that by Christmas in 2017, turkeys would be cooked using atomic power from new reactors at Hinkley.
The latest bad news about the plant came just over a week after the public spending watchdog condemned the government for locking consumers into an “expensive and risky” project by signing a subsidy deal guaranteeing a set price for power from the reactors.
The Green party said EDF’s review of costs should be the “final nail in the coffin” for Hinkley, a third of which is financed by the Chinese General Nuclear Power Group.
“Hardly a week passes at the moment without new evidence that Hinkley is a terrible deal,” said the party’s co-leader, Jonathan Bartley.
John Sauven, executive director at Greenpeace UK, said: “Hinkley is already over time and over budget after just a few months of building work. Today’s news is yet another damning indictment of the government’s agreement to go ahead with this project.”
EDF said if the £2.2bn cost increase came to pass, its rate of return on the project would drop from 9% to 8.2%. The company’s share price fell 0.3% to €9.45 on Monday after the announcement. Some analysts have factored in a delay to the plant.
Dr Paul Dorfan, a vocal Hinkley critic at University College London’s EnergyInstitute, said the admission showed that lessons had not been learned from the same reactor design being built at Flamanville in France and Olkiluoto in Finland.
“On top of the National Audit Office [report], on top of the fiasco of Flamanville and Olkiluoto, on top of the [UK subsidy] deal itself, which has been universally slated by every financial expert, now we see another £2bn on the top,” he said.
Dorfman said the estimated delay also called into question new-build nuclear’s ability to keep the lights on during the next decade.
Jenifer Baxter, head of energy at the Institution of Mechanical Engineers, said any delay to Hinkley “means that it’s possible that some existing power stations will require further life extensions”. Any gap in electricity generation would need to be filled with gas and other technologies, she said.
The Department for Business, Energy and Industrial Strategy said: “As the developer has made clear the project remains on track to meet its first major milestone in 2019.
“The UK government negotiated a competitive deal which protects consumers and ensures that all of the cost of construction, including any overruns, sits with the contractor.”
Source: Adam Vaughan – Guardian
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