French energy giant EDF has revealed that completion of the troubled Hinkley Point C nuclear power plant in England is likely to be delayed by a further 12 months, costing the company an additional €2.5 billion, or around $A4.2 billion.
The Hinkley Point C nuclear powerplant is set to be Britain’s first new nuclear power plant in over 30 years but was meant to be operational by 2025 at a cost of “only” £18 billion (in 2015 prices).
EDF, which also manages France’s fleet of 57 nuclear reactors, only took a final investment decision (FID) in mid-2016 – despite the project having origins as far back as 1981 – and construction officially got underway in 2017. However, repeated delays and cost blowouts had pushed completion of the project out to 2029 at a cost of £31 billion (2015 prices).
Once again highlighting the difficulty of building new nuclear power plants, EDF was forced to announce at the end of last week that electromechanical work on Hinkley Point C’s Unit 1 reactor would likely result in a 12-month delay, pushing commissioning out to 2030.
As a result, EDF announced an impairment to its net income of €2.5 billion, with a final completion cost for the project now estimated at around £35 billion (2015 prices), or £48 billion in current value, which converts to around $A92 billion, and is nearly double the original costs expected for Hinkley Point C.
Image Credit: EDF
EDF also said that, if a further 12-month delay materialises in a worst-case scenario for construction of Hinkley Point C’s Unit 1, costs would increase by a further £1 billion (2015 prices).
And while the 3.2 GW Hinkley Point C nuclear power plant is expected to generate around 7 per cent of Britain’s electricity demand, the cost to British taxpayers could be as much as £2 billion a year, as subsidies to EDF.
Nevertheless, EDF has been given the go-ahead to build a second new nuclear power plant in the UK, Sizewell C in Suffolk, another 3.2 GW project that was approved and reached FID in the middle of 2025.
Sizewell will contribute to the £2 billion a year in subsidies EDF is receiving from the British taxpayer but will also benefit from another £1 billion being added to consumer bills through a separate nuclear levy scheme to fund the project – and which will leave taxpayers on the hook for any potential cost blowouts.
The last nuclear power plant in the UK to begin operations was Sizewell B, which started construction in 1988 and began operations in 1995.
Hinkley Point C’s Unit 2 is expected to be commissioned 12 months after the commissioning of Unit 1.
