Francois de Beaupuy
Thu, May 19, 2022,
(Bloomberg) -- Electricite de France SA’s flagship Hinkley Point C nuclear plant project will cost more than expected and take longer to complete as the pandemic, supply-chain disruptions and Russia’s invasion of Ukraine boost the cost of materials and weigh on progress.
EDF now expects the two reactors it’s building in Southwest England to cost between £25 billion ($31.2 billion) and £26 billion, the French energy giant said in a statement Thursday. That’s up from a previous range of £22 to £23 billion.
It’s the fourth budget increase in five years. The company also pushed back the date when the first reactor will produce power by 1 year to June 2027.
“People, resources and supply chain have been severely constrained,” EDF said in the statement.
The two reactors are blazing a trail for a nuclear renaissance in Britain, as the government seeks to boost the country’s energy independence and reduce its reliance on fossil fuels. While rising costs of metals, cement and labor are affecting numerous industries, the revised plan may revive a controversy over how expensive the technology is and whether further holdups are inevitable.
The reassessment comes as EDF is in talks with the UK government to arrange financing for a second UK nuclear plant that would use the same design. Delays and cost overruns may put off investors at a crucial point in negotiations for the proposed Sizewell project. Reactors compete for investor capital with renewables, which provide returns much quicker.
EDF has previously increased the Hinkley Point budget in 2017, 2019 and in January 2021, from an initial estimate of £18 billion when the contract was signed with the U.K. in 2016. The debt-laden French utility has a 66.5% stake in Hinkley Point C and China General Nuclear Power Corp. owns the rest. The cost overruns may force the French company to take on a larger part of the project.
New one year delay at UK Hinkley Point nuclear plant: EDF
PUBLISHED : 20 MAY 2022
WRITER: AFP
Hinkley Point, in southwest England, is Britain's first new nuclear power plant in more than two decades
PARIS - An already-delayed giant nuclear plant in southwest England will open a year later than planned and cost up to pound sterling3 billion more than previously thought, French electricity giant EDF said Thursday.
The total cost of Hinkley Point C, which aims to provide seven percent of Britain's total power needs, had already swelled to as much as pound sterling23 billion and had been due to begin generation in June 2026, already well behind schedule.
Hinkley Point is Britain's first new nuclear power plant in more than two decades.
"The start of electricity generation for Unit 1 is targeted for June 2027, the risk of further delay of the two units is assessed at 15 months, assuming the absence of a new pandemic wave and no additional effects of the war in Ukraine," EDF said in a statement adding that costs were now estimated between pound sterling25 billion ($31 billion, 30 billion euros) and pound sterling26 billion.
EDF said in its statement that there would be no additional cost to British consumers.
"During more than two years of the Covid-19 pandemic, the project continued without stopping. This protected the integrity of the supply chain and allowed the completion of major milestones. However, people, resources and supply chain have been severely constrained and their efficiency has been restricted.
"In addition, the quantities of materials and engineering as well as the cost of such activities, including, in particular marine works have risen," it added.
- 'Risky and expensive' -
Britain has a total of 15 nuclear reactors at eight sites around the country, but many of them are now approaching the end of their lifespan.
However, the government wants to maintain the 20 percent of electricity it generates from nuclear to help meet its pledge to reduce carbon emissions to net zero by 2050 and tackle climate change.
Critics have focused on the proposed design, which uses a new European Pressurised Reactor (EPR) system that has been beset by huge cost overruns and delays at sites in France and Finland.
Britain's National Audit Office has long criticised the scheme, with the watchdog saying the government has "locked consumers into a risky and expensive project with uncertain strategic and economic benefits".
Launched in 1992 as the pinnacle of French nuclear technology, the EPR was originally developed by Areva in a joint venture with Germany's Siemens, which later withdrew.
Later taken over by EDF, the project called for a plant able to operate for 60 years using pressurised water technology, the most widely-used in reactors around the world.
Similar problems to those at Hinkley have hit EDF's project at Flamanville in western France, although the firm has successfully launched two reactors with Chinese partners in Taishan, China.
PARIS - An already-delayed giant nuclear plant in southwest England will open a year later than planned and cost up to pound sterling3 billion more than previously thought, French electricity giant EDF said Thursday.
The total cost of Hinkley Point C, which aims to provide seven percent of Britain's total power needs, had already swelled to as much as pound sterling23 billion and had been due to begin generation in June 2026, already well behind schedule.
Hinkley Point is Britain's first new nuclear power plant in more than two decades.
"The start of electricity generation for Unit 1 is targeted for June 2027, the risk of further delay of the two units is assessed at 15 months, assuming the absence of a new pandemic wave and no additional effects of the war in Ukraine," EDF said in a statement adding that costs were now estimated between pound sterling25 billion ($31 billion, 30 billion euros) and pound sterling26 billion.
EDF said in its statement that there would be no additional cost to British consumers.
"During more than two years of the Covid-19 pandemic, the project continued without stopping. This protected the integrity of the supply chain and allowed the completion of major milestones. However, people, resources and supply chain have been severely constrained and their efficiency has been restricted.
"In addition, the quantities of materials and engineering as well as the cost of such activities, including, in particular marine works have risen," it added.
- 'Risky and expensive' -
Britain has a total of 15 nuclear reactors at eight sites around the country, but many of them are now approaching the end of their lifespan.
However, the government wants to maintain the 20 percent of electricity it generates from nuclear to help meet its pledge to reduce carbon emissions to net zero by 2050 and tackle climate change.
Critics have focused on the proposed design, which uses a new European Pressurised Reactor (EPR) system that has been beset by huge cost overruns and delays at sites in France and Finland.
Britain's National Audit Office has long criticised the scheme, with the watchdog saying the government has "locked consumers into a risky and expensive project with uncertain strategic and economic benefits".
Launched in 1992 as the pinnacle of French nuclear technology, the EPR was originally developed by Areva in a joint venture with Germany's Siemens, which later withdrew.
Later taken over by EDF, the project called for a plant able to operate for 60 years using pressurised water technology, the most widely-used in reactors around the world.
Similar problems to those at Hinkley have hit EDF's project at Flamanville in western France, although the firm has successfully launched two reactors with Chinese partners in Taishan, China.
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