nuclear-news

By now, construction of EDF’s new nuclear reactors at Hinkley Point in Somerset was supposed to be well underway, ready to fill the looming energy supply crunch as old coal plants close.

More reactors were supposed to be following on Hinkley’s heels, with 16 gigawatts – enough to meet about a third of peak winter UK electricity demand – up and running by 2025, replacing Britain’s existing nuclear plants as they retired.

Instead, cash-strapped EDF is still to take a final decision on Hinkley, with the latest hoped-for decision date, this Tuesday, likely to be missed.

First power from the Somerset plant is not due until 2025 and while other developers are aiming to start generating around the same time, they are years off investment decisions.

“Everybody would have liked the nuclear new build programme to have happened sooner,” admits Alan Raymant, chief operating officer of Horizon Nuclear Power, which plans to build two reactors at Wylfa on Anglesey, followed by two more at Oldbury in Gloucestershire……..

With new owners bringing a different reactor technology to the project – twin Advanced Boiling Water Reactors (ABWRs) with a combined capacity of 2.7GW – Horizon pushed its target for first power from Wylfa back to the “first half of the 2020”. This remains the aim, Raymant confirms: “We are looking at 2024, 2025.”

To do that, it needs to take a final investment decision on the plant in “early 2019”. That gives Horizon three short years to secure planning consent, safety approval for the ABWR design, a Government subsidy contract, EU state aid clearance, and the backing of investors……..

the biggest hurdle will be finding the money. If the UK wants to deliver16 gigawatts of new nuclear – now by a revised target of 2030 – it is going to need to secure many tens of billions of pounds of investment.

“We have to look to widen the pool of investors as far as we can,” says Raymant. “We can’t just rely on state-owned enterprises to provide that investment.”

The comment is a clear reference to Hinkley. EDF (85pc French state-owned) had hoped to build the plant in partnership with Centrica, the listed UK utility, but Centrica withdrew in 2013, citing spiralling costs and delays.

EDF set out to bring other investors on board: pension funds and Middle Eastern sovereign wealth funds were touted, but none signed up. “For third parties observing the announcements of delays and cost overruns for the EPRs [the Hinkley reactor technology] under construction, it is difficult to commit,” Jean Bernard-Levy, EDF chief, admitted.

Only China’s state nuclear corporation has so far agreed to invest, taking a lower share than EDF had hoped and even then only in return for a red carpet invitation to build its own reactor technology at Bradwell.

EDF also abandoned the idea of project-financing Hinkley, despite securing £17bn of Government loan guarantees; it has since emerged the loans had been awarded a sub-investment grade, BB+ rating by Infrastructure UK. EDF is now struggling to get the project over the lineby funding its share from its own balance sheet.

Hiroaki Nakanishi, the head of Hitachi, has already warned that the debacle raises “very serious concerns” about its own investment in the UK and questions over the “real solutions for setting up financial support”.

For Horizon, Raymant says, project-financing is a must. Hitachi only plans to retain a minority stake in the eventual construction.

“The challenge for us and for Government is to make sure that the framework that’s in place actually enables a wider range of investors to participate,” he says. “If it doesn’t do that, we won’t deliver a programme of new nuclear.”…… http://www.telegraph.co.uk/finance/newsbysector/energy/12156773/UK-new-nuclear-plan-will-fail-without-private-investors-says-Horizon-chief.html