EDF raises price projection for Hinkley Point C by £3bn

EDF has raised its price projection for Hinkley Point C by another £3 billion and delayed the start date for generation at the nuclear power station in Somerset by another year.

It now expects the 3.2GW plant to cost between £25 billion and £26 billion to build and the first reactor to being generating power in June 2027, assuming there are no new waves of the coronavirus pandemic or additional effects from the war in Ukraine.

The company said there are risk of further delays to the two reactor units of 15 months.

The project’s managing director Stuart Crooks stressed that its Contracts for Difference agreement means there will be “no cost impact on British consumers or taxpayers.”

In a message to the Hinkley Point C team published by EDF, Crooks blamed the setbacks primarily on the coronavirus pandemic, explaining that it was forced to cut worker number of the site from more than 5,000 to 1,500 when it hit: “For many months after that, we remained far below our plan for site numbers as our ability to fully ramp up activity was thwarted by the need for measures to prevent infection.

“Keeping workers safe with social distancing in canteens, buses and at work meant we had no choice but to become less efficient. We prioritised critical areas of unit one by focusing limited resources where they mattered most and we slowed or stopped work elsewhere.

“In civil construction alone, having fewer people than planned means we lost in excess of half a million individual days of critical work in 2020 and 2021.  Our supply chain was also hit hard and is still impacted now.

“In April 2020, 180 suppliers were fully shut down, but even as late as February this year, more than 60 suppliers were operating with reduced productivity due to Covid.”

Crooks said the schedule and costs have also been affected its work to adapt the reactor design for UK-specific regulations but said this would not impact future projects such as EDF’s planned sister plant at Sizewell C in Suffolk: “The completion of our most detailed ‘execution’ design will give Sizewell C a major head-start with more certainty on costs and quantities. As we progress on unit 2, all the evidence shows that the fastest way to get more nuclear for Britain is to repeat the same design with no changes.”

There have multiple delays and budget increases since Hinkley Point C was given the final go-ahead in September 2016. At the time, the power station was expected to cost £18.1 billion to build and start generating power at the end of 2025.

In April 2017, EDF raised the projected cost by £1.5 billion to £19.6 billion and said the first and second reactors could be delayed by up to 15 months and 9 months respectively, adding another £700 million to the price tag.

The company announced in September 2019 that the estimated cost had risen again to between £21.5 billion and £22.5 billion and that the risk of delays had also increased.

And then in January 2021, EDF raised the projected cost by another £500 million to between £22 billion and £23 billion and postponed the start date for generation to June 2026. It said the possible overall delays to reactors one and two of 15 months and 9 months could still raise costs by an additional £700 million.

The government is introducing a regulated asset base financing model for future nuclear projects that would allow investors to begin receiving revenues from energy consumers before the plants begin generating power. The aim is to reduce the significant costs of financing projects through construction.

Commenting on the latest announcement from EDF, the Stop Sizewell C campaign group said: “Hinkley C’s rocketing costs should send investors considering Sizewell C running for the hills – and have ministers reassessing the wisdom of a special nuclear tax.

“The £20 billion estimate for Sizewell C is already two years out of date, with zero chance of it being delivered at that cost. EDF once again has to suck up this latest price hike, but Sizewell C’s will fall on consumers. Sizewell C is risky, expensive and in no one’s interest except EDF’s.”