Nils Pratley: One can take comfort that EDF, and not UK billpayers, will bear the cost of the [Hinkley] cost overrun. That was the sole consolation in a deal that obliges consumers to buy Hinkley’s juice at sky-high prices for 35 years. But one cannot relax. Sizewell C looms as EDF’s next project and the government is contemplating obliging consumers to carry some of the construction risks in Suffolk. This is a “regulated asset base” (RAB) model. Under RAB, consumers would start to pay for a plant before it is built but the electricity at the end would be cheaper. Sizewell, it is suggested, is a suitable candidate for RAB because EDF will merely be replicating its Hinkley plant and will start with greater engineering experience. Well, it’s an idea and, clearly, the appeal of the trade-off will depend on the terms. EDF would still have to be on the hook for, say, a 20% cost overrun. But if the electricity were to be substantially cheaper than Hinkley’s, there might be a deal to be done if more nuclear-generated power is deemed essential for baseload supplies. But there are two reasons to be cautious. First, note the warning of the National Infrastructure Commission in a report last year: “There is limited experience of using the RAB model for anything as complex or as risky as nuclear.” Second, EDF’s latest estimate for Hinkley may not be its last. Every upwards revision weakens the case for RAB – and the argument was already in borderline territory.
Guardian 26thSept 2019 read more »
Green Party co-leader Jonathan Bartley argues the latest cost upgrades for Hinkley Point should trigger a serious re-think about the UK’s new nuclear plans. Another week, another likely delay and another increased cost estimate for the new nuclear reactor at Hinkley Point.
Business Green 27th Sept 2019 read more »