Hinkley Point C could go £28bn over budget as EDF predicts further delays

EDF

EDF SAYS its Hinkley Point C nuclear power plant could be delayed to as late as 2031, with costs rising to £46bn (US$58bn).

The project, which includes building two 1,630 MW nuclear reactors in Somerset, was estimated to cost £18bn when it was first agreed in 2016 and had been scheduled to begin operations in 2025. The project has since struggled with a series of delays and cost hikes. The firm has now outlined three scenarios that push operations back until the end of the decade at the earliest.

The first reactor could begin operations in 2029, or, under a base case scenario that assumes delays in the electromechanical work and testing start-up, could fall back to 2030. Under a third scenario, there could be a further delay to 2031.

In a letter to staff, Stuart Crooks, managing director of Hinkley Point C, said: “Like other infrastructure projects we have found civil construction slower than we hoped and faced inflation, labour and material shortages on top of Covid and Brexit disruption.”

He added that EDF has been required to substantially adapt its reactor design to satisfy British regulations, requiring 7,000 changes that have added 35% more steel and 25% more concrete.

EDF says the delays and extra work will hike costs to between £31-35bn in 2015 values meaning under the worst case scenario the price could reach £46bn.

Hinkley Point C is key to the government’s target to almost quadruple nuclear power output from 6.5 GW today to 24 GW by 2050. To meet this goal, it published a plan earlier this month that includes building at least one other plant the size of Hinkley Point C and Sizewell C that EDF is planning in Suffolk, along with suites of smaller modular and advanced nuclear reactors.

Crooks said that 70% of the equipment required for Hinkley Point C’s first reactor had been delivered to site and that with the reactor dome having been lifted into place in December installation of the reactor pressure vessel is expected later this this year. Testing of the instrumentation and control system is currently underway. He predicted that lessons learned building the first reactor should lead to performance improvements of 20–30% when building the identical second reactor, though EDF has also experienced delays building the same reactors in Finland and France.

News of the delay prompted further criticism from nuclear opponents who argue that governments should invest in renewables instead. There are also concerns that with the Chinese junior partner in Hinkley Point C refusing to contribute any more money to the project that the UK government will be called up on to help meet the climbing costs. A government spokesperson told the Financial Times that any additional costs “will in no way fall on taxpayers”.  

Government takes larger stake in Sizewell C

Earlier this week, the UK government announced it would make an extra £1.3bn available to support EDF’s construction of Sizewell C so that construction work can continue ahead of a final investment decision being made later this year. Sizewell will use the same design as Hinkley Point C.

The government’s investment further consolidates its position as the majority shareholder in the project. Last year, it bought out the project’s Chinese state-owned partner China General Nuclear as part of efforts to limit Beijing’s involvement in critical infrastructure.

The government has now invested £2.5bn in Sizewell C and the project is being funded by a so-called regulated asset base model under which surcharges on consumer energy bills help fund the project while it’s being constructed. Last year, the government opened up a bidding process to attract external investors in a bid to raise an estimated £20bn to construct the plant.