The cost increase raises difficult questions over the government’s plan to support another of EDF’s nuclear projects, at Sizewell in Suffolk, by putting the taxpayer on the hook for cost overruns. The government argues that a funding model which shares the financial risk between EDF and British energy consumers would lower the overall energy cost. But given EDF’s track record on cost overruns, many wonder whether the risks are worth taking at all. More worryingly, there are new questions over whether British homes are already paying too much to cushion EDF against the risks at Hinkley. A £2.9bn overspend is no small beer, but EDF will take it on the chin because, despite the multibillion-pound overrun, Hinkley is still a profitable venture. The company expects its rate of return for the project to fall from more than 9% when the deal was first struck to a still-respectable 7.7%. Which raises the question: if the Hinkley nuclear deal was generous enough to cushion EDF against its own cost overruns, was it a good deal for bill payers? And should ministers be striking another?
Guardian 29th Sept 2019 read more »