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Costs of Hinkley Point C nuclear station predicted to balloon out

 France’s EDF has warned that the costs of the Hinkley Point C nuclear
power plant under construction in the south-west of England could balloon
by an additional £3bn, while it also warned of further delays because of
supply chain problems arising from Covid-19 lockdowns.

In a statement released late on Thursday evening, the French state-backed utility
estimated that the 3.2 gigawatt plant in Somerset could cost a total of
£25bn-£26bn compared to an estimate of £18bn when it received the
go-ahead in 2016.

It is now anticipated that the first of the two
next-generation European Pressurised Reactors (EPR) being installed at
Hinkley Point C will start generating electricity in June 2027 — a year
later than previously scheduled — but EDF added that the “risk of
further delay of the two units is assessed at 15 months”. EDF has been
forced to revise up the costs of the project on numerous occasions. At the
most recent revision in January 2021, it had estimated the total at £23bn.

EDF quotes costs in 2015 prices in order to maintain consistency for the
markets but the real bill will be even higher after accounting for
inflation. EDF stressed that the additional costs would not affect UK
consumers. The construction costs are being met by EDF and its junior
partner in the project, China’s CGN, in return for a 35-year contract
that guarantees a price of £92.50 per megawatt hour of electricity
produced, rising with inflation.

In a note sent to Hinkley Point C workers
on Thursday, the project’s managing director Stuart Crooks blamed
lockdowns during the pandemic, during which it had to reduce the number of
staff who could safely operate on site from about 5,000 to 1,500. “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,” he wrote. “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.”

However, the further delays will not
surprise critics of the company. In France, EDF’s flagship Flamanville 3
plant, which will also use EPR technology, is running more than a decade
behind schedule and costs have also spiralled, sparking at one point a
rebuke by the French government as it ordered the group to address issues
with project management and industrial skills. At the same time as
suffering problems with new projects, EDF faces outages at several existing
reactors in France because of welding problems, sending nuclear output to
its lowest level in decades.

 FT 20th May 2022

May 21, 2022 - Posted by | Uncategorized

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