Hinkley nuclear costs now estimated at £37bn

Estimated cost of Hinkley Point C nuclear plant rises to £37bn Critics point to volatility of scheme but energy department says price ‘will not affect bill payers’, Guardian, Terry Macalister, 8 July 16, The total lifetime cost of the planned Hinkley Point C nuclear power plant could be as high as £37bn, according to an assessment published by the UK government. The figure was described as shocking by critics of the scheme, who said it showed just how volatile and uncertain the project had become, given that the same energy department’s estimate 12 months earlier had been £14bn.

The latest prediction comes amid increasing speculation about the future of the controversial project in Somerset, whose existence has been put in further doubt by post-Brexit financial jitters.

Hinkley has been a flagship energy project for the British government and in particular for the chancellor, George Osborne, who lobbied hard and successfully for China to take a stake in the scheme…….

experts said the extra money, if the cost did remain at £37bn, would have to come from somewhere – probably the taxpayer – or be shaved off other DECC budgets available for different energy projects, such as windfarms and solar arrays. “This whole-life cost of £37bn is a truly shocking figure. It is an extraordinary ramp-up from last year’s figure, and just underlines how hard it is to get a real handle on the long-term cost of Hinkley,” said Paul Dorfman, senior research fellow at the Energy Institute, University College London.

The latest increase is a new blow to a scheme with an already precarious outlook due to the debt problems besetting its lead developer, EDF, which has been hit by rising costs and delays to another new-build nuclear power station scheme, at Flamanville, in Normandy……

The Brexit vote has made the British commercial environment much more uncertain, and French trade unions, who want the final investment decision postponed, have been pressing independent directors to convince EDF’s chief executive, Jean-Bernard Levy, to ditch Hinkley.

Critics of the scheme have claimed that the fall in the value of the pound since the referendum vote will increase the costs of the scheme to EDF’s French contractors, who work in euros………. the EDF staff council last month began legal action to try to force the company to release documents relating the project, including all the contracts it had signed with the British government and its co-investor, the Chinese utility CGN.

The fall in power prices in the UK and continental Europe that has influenced the latest lifetime cost assessment for Hinkley is also responsible for some of the financial difficulties at EDF.

There have also been suggestions that Chinese investors are becoming more nervous about Hinkley and are demanding more concessions from EDF, so that more Chinese project managers and suppliers are involved. EDF has denied this. https://www.theguardian.com/uk-news/2016/jul/07/hinkley-point-c-nuclear-plant-costs-up-to-37bn

July 9, 2016 - Posted by Christina Macpherson | business and costs, politics, UK

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