Nick Butler: To no one’s great surprise, the cost of the planned new nuclear reactors at Hinkley Point in southwest England has been increased again and another possible year’s delay has been added to a project that is already eight years behind schedule. The cost could now reach £20.3bn – up from the £18bn quoted last year and the £16bn figure set in 2015. EDF says £1.5bn of the increase is due to a “better understanding” of the construction work needed and UK regulatory requirements. The French energy group is still hoping to complete the project by the end of 2025 but its statement issued on Monday provides a fallback by quoting the possibility of a further 15-month delay to the first reactor, which would take us into 2027. EDF’s comments suggest an inappropriate degree of complacency: £1.5bn is an awful lot of “better understanding”, particularly when the project has been in preparation for the last eight years. Prime Minister Theresa May’s review of the project last year confirmed that the cost of any overruns or delays would fall on the company rather than on the UK taxpayer or consumer. As a result, EDF’s margin on Hinkley will fall from 9 per cent to 8.2, but the company’s shareholders must be wondering how many more cost increases and delays there will be if the project goes ahead. Nothing in Monday’s statement, for instance, takes account of any consequences from Brexit or from rising UK inflation. Sorting out EDF is one thing. But the continuing failures and setbacks afflicting the EPR raise serious questions for energy policy in the UK and in France. New nuclear, led by EDF with several more reactors planned beyond Hinkley, has been at the heart of UK policy for the last few years. But the prospect of 16GW of new nuclear by the mid 2030s now looks unattainable. In France, the fleet of old reactors that will need replacement over the next 25 years is on an even bigger scale. But, given the cloud of doubt over the viability and cost of the EPR, what technology can fill the gap? The simplest answer would be for the French and UK governments to abandon Hinkley before any more money is wasted. That would require an agreement that no compensation would be paid in either direction, but instead serious money would be devoted to developing a simpler and cheaper new generation of reactors. That would avoid a complex legal fight in which only the lawyers would win and would keep open the possibility that nuclear could still play its part in the European energy market.
FT 4th July 2017 read more »
French energy supplier EDF has estimated that the cost of completing the new Hinkley Point nuclear plant will be £1.5bn more than expected. The company, which is the project’s main backer, said the total cost of the plant was now likely to be £19.6bn. Hinkley Point C would be the UK’s first new nuclear plant for decades, but has been beset with budget problems. A review of the project found there was also a risk it could be delayed by up to 15 months. However, EDF said it still hoped to finish the first phase by the end of 2025 as planned. Critics of the deal have warned of escalating costs and the implications of allowing nuclear power plants to be built in the UK by foreign governments. Last month the National Audit Office called it “a risky and expensive project”.
BBC 3rd July 2017 read more »
Guardian 3rd July 2017 read more »
[Machine Translation] EDF foresees a £1.5 billion pounds increase and a delay of 15 months for the delivery of the first nuclear reactor at Hinkley Point. Over the last few weeks, threatening clouds have accumulated over Hinkley Point, the English site that will house two EPR nuclear reactors built by EDF. The cold shower fell on Monday morning: the French electrician announced an upward revision of the costs of the site and the timetable, in which he foresees a “£ 1.5 billion increase” compared to the initial estimate. For a total invoice now estimated at £19.6 billion (22.3 billion euros). And he believes that the project could lag “15 months for tranche 1 (the first reactor), and 9 months for tranche 2 (the second)”. This would increase the costs by an additional $ 0.7 billion. These cumulative elements will weigh on the projected rate of return of the project, which would rise from 9% to “around 8.2%” if the risks of delays are confirmed. For EDF, these additional costs “result mainly from a better understanding of the design, adapted to the demands of the regulators, the volume and sequencing of on-site work and the gradual introduction of supplier contracts”.
Les Echos 3rd July 2017 read more »
Electricite de France SA raised the cost of its project to build two nuclear reactors in southwest England, saying the final bill could come to more than 20 billion pounds ($26 billion). The estimated completion cost for the Hinkley Point C reactors is now 19.6 billion pounds, up from 18 billion pounds last September, and delays could add a further 700 million pounds, the Paris-based company said Monday in a statement. The revised costs “result mainly from a better understanding of the design adapted to the requirements of the British regulators, the volume and sequencing of work on site and the gradual implementation of supplier contracts,” EDF said. There’s a risk of a 15-month delay for Unit 1 — initially planned for completion at the end of 2025 — and a nine-month holdup for Unit 2.
Bloomberg 3rd July 2017 read more »
City AM 3rd July 2017 read more »
The new nuclear plant at Hinkley Point is likely to be at least £1.5 billion over budget and could be 15 months late, EDF has admitted. The French company said that an internal review of the Somerset project, which was supposed to cost about £18 billion and generate electricity by the end of 2025, had concluded that it would now cost Â£19.6 billion but could hit £20.3 billion if delays materialised. The first reactor was at risk of being 15 months late, delaying the first power generation to 2027, while the second reactor could be nine months late.
Times 4th July 2017 read more »
Telegraph 3rd July 2017 read more »
Daily Mail 3rd July 2017 read more »
In Cumbria 3rd July 2017 read more »
BBC gave Paul Dorfman the last word in a debate with Tim Yeo (former Tory Environment Minister and key nuclear proponent).
BBC R4 ‘The World Today’, (29.12 into the programme) 3rd July 2017 read more »
[Machine Translation] The announcement on Monday of an upward revision of the bill of the two English EPRs could be followed by other snags in the coming years. On the day of the signing of the Hinkley Point contract with the British authorities in September last year, Jean-Bernard Levy had this small phrase: “The hardest is before us”. The CEO of EDF spoke of gold, knowing nothing of the risks pointed out by the internal review he had ordered a few months earlier to his adviser Yannick d’Escatha before submitting the investment project of some 20 billion Of euros to its board of directors: unprecedented construction time constraints, demanding demands on the part of the regulator, inadequate project governance. “Risks are well identified and surmountable,” said Jean-Bernard Lévy. The essential thing was then to sign, after ten years of complex negotiations, a highly symbolic and political project. The then Minister of Economy, Emmanuel Macron, had put all its weight in it, pointing in particular to the Assembly “a profitability of more than 9% for EDF”. “So it’s good for EDF,” he concluded. Today, the examples given to justify the additional costs were in fact already debated before the investment decision. For example, requests from ONR (the UK equivalent of the Nuclear Safety Authority) for the ventilation of the plant’s buildings. It is therefore questionable whether the margins foreseen at the time of signing the contract were too short. Similarly, the new cost estimate at project completion incorporates “the success of operational action plans”. Kesako? These are actually savings and optimizations planned on the project, but they are not yet guaranteed or even identified. “Some action plans are in progress, others will be launched,” says one said to the electrician. At the end of 2015, the Escatha review already indicated, according to our information, a construction cost “subject to the actual realization of 2 billion pounds of savings that are only partially identified to date”. An amount that EDF does not deny, even today. These savings plans will therefore remain to be implemented. The hour of truth will not come before several years, when EDF and its Chinese partner CGN, who have already spent 3.1 billion pounds on the job at the end of 2016, will have begun to experience the British industrial fabric. This is a big question mark: Britain has not built a nuclear reactor for more than twenty years. And Areva, which is to build the two British nuclear boilers as a prelude to the renewal of the tricolor park, is not, far from it, industrially put back upright.
Les Echos 3rd July 2017 read more »
DEBATE: ¬¬In light of EDF adding £1.5bn to its estimated costs, should the government rethink building the nuclear plant Hinkley point C? Jonathan Bartley and Tom Greatrex
City AM 4th July 2017 read more »
TODAY’S school leavers will still be paying for Hinkley Point when they draw their pensions, green campaigners said yesterday as EDF admitted the nuclear power plant’s building cost had shot up to almost £20 billion.
Morning Star 4th July 2017 read more »
HPC demonstrates how far the privatisation of utilities has fallen short of creating free markets. There is no involvement in markets in the decision to go for Hinkley C. It wasn’t consumers who decided to buy nuclear energy; the government made the decision on their behalf, and committed them to this expensive option for 35 years. Moreover, the government itself didn’t even use the market to select a firm to construct the power station – it simply opted for the first potential supplier which came into its head, which happens to be another country’s state-owned electricity company. It is rather as if, rather than having a choice of whether to go the Tesco, Sainsbury’s or Waitrose, the government had decided on our behalf that we will all have to eat food bought in bulk purchase from state farms in Kazakhstan. At the same time, Theresa May is telling us that the market in consumer electricity prices hasn’t worked and that she will have to cap the costs. Unless the government can demonstrate that there is some kind of advantage from privatisation of utilities, the stronger public support will grow for the Corbyn option of renationalising them.
Spectator 3rd July 2017 read more »