nuclear-news

 Disagreements between the two Chinese groups – China General Nuclear Power Corp and China National Nuclear Corp – and EDF over terms are said to be so wide that there was little hope of a final investment decision by both sides in time for a visit by Chinese Premier, Xi Jinping, to Britain on October 20. Instead, a “heads of agreement” may be announced, which would fall some way short of a final go-ahead for the scheme. (1)

 EDF Energy Chief Vincent de Rivaz says he believes the two state-backed Chinese investors will increase the size of their stake allowing Hinkley to go ahead. (2) But if the Chinese stick to their demands the financially challenged EDF will be left trying to fund at least 70% of the project representing an initial outlay of more than £11 billion. EDF and its partners will also have to accept all of the construction risk associated with the project. Moody’s, in particular, pointed to delays and cost overruns at Flamanville saying there is a question mark over the ability of the consortium to deliver on time and to budget. (3)

Ballooning costs and further delays to the plant in Normandy mean the start date for Flamanville has now been pushed back to the end of 2018, 11 years after construction began, and costs have more than tripled from 3 billion euros to 10.5 billion euros. (4) According to The Ecologist delays at Flamanville are threatening to sink the Hinkley project.

French regulators are to demand another lengthy round of tests on Flamanville’s flawed reactor vessel. And if Flamanville isn’t working by 2020, £17 billion of UK finance guarantees for Hinkley C will collapse. A meeting of French nuclear safety experts, which took place at the end of September, determined that there are still important safety questions to be resolved. The concerns centre on the steel reactor vessel at the heart of the reactor, which as it was revealed last year, is metallurgically flawed owing to large areas of excess carbon in the steel causing structural weaknesses.

 Similar problems apply to the vessel head. ASN, the French nuclear safety inspectorate, is now expected to follow the advice of the Permanent Group of Experts on Pressurised Nuclear Equipment (PGEPNE) and, within weeks, order another round of safety tests that could take until mid-2016 to complete. The last thing EDF needs is yet another delay, additional cost and more uncertainty – but that is exactly what it is getting. It also forces the company to make a very dangerous decision.

Should it cut its losses, put construction on hold, send its armies of workers home – and in the process lose critical momentum that will assure that its completion targets will be missed? Or should it push ahead with construction at the site, and risk throwing good money after bad in the event of the ‘nightmare’ possibility: that at the end of all the tests on the Flamanville reactor vessel, it will be found irremediably deficient and require total replacement.

Chinese president Xi Jinping will be on a state visit to Britain this month from 20th to 23rd October during which EDF is hoping a complex multi-party deal will be signed between itself, Xi Jinping, Chinese state nuclear companies and the UK government to fully finance Hinkley C’s construction, estimated to cost almost £25 billion. But the continuing problems with the Flamanville reactor vessel could turn the Chinese off altogether. The Chinese are increasingly worried about their own two EPR reactors under construction at Taishan 1 and 2. Their reactor vessels and heads were also forged by Le Creusot and while test results have not been released, they probably suffer from the same or metallurgical defect of ‘carbon aggregation’ would result in long delays and cost escalations. In which case the last thing they would want is yet another failed EPR project on their hands!

As part of its support package the UK has offered investors in bonds to finance Hinkley C construction £17 billion in finance guarantees – meaning that they will get their capital and interest paid no matter what, at British taxpayer expense, even if the Hinkley C project and its shareholders all go belly up. The finance guarantees have been approved by the European Commission – but subject to a number of important conditions. One condition is that if the Flamanville reactor is not complete and operational by the end of 2020, the guarantees become invalid and bond holders must be repaid out of shareholder equity. At the time all this was being agreed the idea that Flamanville might not be completed by the end of 2020 would have been regarded as the height of improbability. However it now looks increasingly probable. But with the completion date now set as the fourth quarter of 2018, which is probably code for early 2019, it is getting painfully close to the 2020 cut-off date. Now the requirement to be imposed on EDF and Areva to carry out yet more tests on the Flamanville reactor vessel is certain to cause further delays. (5)

 even pro-nuclear Malcolm Grimston, senior research fellow at the Centre for Environmental Policy, Imperial College, says there are still significant doubts about it going ahead. It still depends on the decision of a financially-challenged EDF, which has seen its share price fall by 40% in the last year. Meanwhile disquiet about the costs of the project and its technical feasibility mean the scheme, which has previously been given cross-party support, is attracting increasingly influential opponents (see table on original). Another pro-nuclear academic, Ian Fells, emeritus professor of energy conversion at Newcastle University (and Small Modular Reactor supporter), says, all the government support can’t mask the fact that the Hinkley project is in “something of a pickle.” (6) Since the Sunday Times declared on 21st June this year that there is a “real risk that Hinkley will come to be seen as a monumental blunder, the most expensive white elephant in British history” (7) there have been growing calls for it to be cancelled. Here’s a selection of critical remarks made since the last nuClear News:………. http://www.no2nuclearpower.org.uk/nuclearnews/NuClearNewsNo78.pdf