EDF says Hinkley Point C could cost up to £35bn

Hinkley Point C nuclear power station, currently under construction in Somerset, could cost up to £35 billion to build and take until 2031 to begin generating power, EDF has admitted.

This worst case scenario would represent a cost increase of more than a third when compared to its previous estimates and a further delay of around three years.

Hinkley Point C has already suffered a series of cost-overruns and delays since EDF gave the final go-ahead to the project in 2016. At the time, the 3.2GW power station was expected to cost £18.1 billion and begin generating power at the end of 2025.

Most recently in May 2022, EDF raised its price projections by £3 billion to between £25 billion and £26 billion. It said the first of the power station’s two reactors was expected to begin generating power in June 2027 but there were risks of further delays to both units of up 15 months.

EDF now says the best case scenario is that the first unit starts operating in 2029. However, its “base case” is that the first reactor begins generating power in 2030. The latter assumes the materialisation of “certain risks inherent in the ramp-up of the electromechanical work and the testing schedule”.

On the basis of these scenarios, the company estimated the cost of the project at between £31 billion and £34 billion.

EDF also raised the possibility of a more “unfavourable” scenario emerging in which the start of generation is delayed by a further year to 2031. In this instance, the company said the cost of the project would rise to £35 billion.

In a letter sent to workers on the project, Hinkley Point C managing director Stuart Crooks said: “We are now well past the halfway mark, with 70% of our equipment for unit one delivered. Many risks are now behind us, like the unique British instrument and control system which has been designed and manufactured, with testing already underway.”

Explaining the cause of the latest delays, Crooks said: “We have had to substantially adapt the EPR design to satisfy British regulations, requiring 7,000 changes, adding 35% more steel and 25% more concrete. This adaptation and approval process is the same other developers bringing new designs into Britain. Now the design of our plant is complete in detail, meaning contractors have certainty over exactly what is needed to build the plant.”

Speaking on Radio 4’s Today programme on Wednesday (24 January), EDF’s director of strategy and corporate affairs, Paul Spence, said: “Going first to restart nuclear in Britain after a long gap has been hard. We’ve had to train the workforce, find the right suppliers, help them build to the nuclear quality we need, and we’ve adapted the design to meet British regulations.

“And since we’ve started in 2016, we’ve faced Covid, a war in Europe, inflation, Brexit – you name it – but a lot of that work to restart is done and now that we’ve been through the pain, we know that others are going to benefit from that.”

He continued: “What we’re seeing in Somerset, where we’re building two reactors, is that the second one is taking 20% to 30% less effort than the first one.”

Spence stressed that EDF will “pick up the tab” for budget overruns at Hinkley and claimed going forward the company will now have much more cost accurate estimates for “any future projects, like the one we hope will go-ahead at Sizewell in Suffolk”.

In his letter to workers, Crooks said: “Experience of building a second unit at Hinkley Point C shows the opportunity for Sizewell C and the British nuclear programme. Sizewell C is the only project in Britain that is ready to benefit from this replication opportunity.”

Tom Greatrex, chief executive of the Nuclear Industry Association, said: “The more nuclear stations we build the quicker and cheaper it will become, so instead of building one plant at a time with long gaps in between projects, a programmatic approach, as outlined in the government’s Nuclear Roadmap, is vital to ensure we build expertise, maintain workforce capability and increase efficiency.

“Hinkley Point C is the most significant green energy project ever in the UK and represents the revival of an industry after a generation of not building any new plants. It has revitalised the supply chain, creating thousands of skilled jobs in the process and will provide vital learnings for the rest of the industry.”

The latest update on Hinkley came hot on the tails of a series of announcements concerning EDF’s sister project at Sizewell.

Last week, Sizewell C announced it had triggered its Development Consent Order after satisfying all of the conditions imposed when it was granted planning permission in 2022, meaning construction work could formally commence.

On Monday this week, the government revealed it had increased its investment in Sizewell C by £1.3 billion, bringing the total to date to £2.5 billion and giving it a majority stake in the project.

On the same day, Together Against Sizewell C (TASC) announced plans to take its legal challenge against the project to the Supreme Court. The protest group had previously sought a judicial review of the Development Consent Order granted to Sizewell C but its request was denied. It subsequently appealed the ruling but its claims were dismissed by the Court of Appeal in December.

Commenting on the latest delays and overspends at Hinkley, fellow campaign group Stop Sizewell C noted that EDF’s cost estimates are stated in 2015 prices and the company’s top end estimate of £35 billion equates to £46 billion in today’s prices.

Alison Downes from Stop Sizewell C said: “Hinkley Point C and Sizewell C epitomise the definition of insanity – doing the same thing over and over and expecting a different result.

“Ministers clearly knew bad news from Hinkley was coming, making last night’s announcement of doubling taxpayers’ investment – to £2.5 billion – in Sizewell C even more inexplicable.

“EDF and its EPR reactors are an unmitigated disaster and it stretches credulity that Sizewell C is affordable. Indeed, the government seems too embarrassed to publish the cost of Sizewell C.

“It should cancel the project immediately instead of handing over scarce billions that could be used instead for renewables, energy efficiency or – in this election year – schools and hospitals.”