Hinkley Point C nuclear could go £28bn over budget, and tax-payer takes larger stake in Sizewell C nuclear.

The Chemical Engineer, by Adam Duckett, 28 Jan 24

EDF SAYS its Hinkley Point C nuclear power plant could be delayed to as late as 2031, with costs rising to £46bn (US$58bn).

The project, which includes building two 1,630 MW nuclear reactors in Somerset, was estimated to cost £18bn when it was first agreed in 2016 and had been scheduled to begin operations in 2025. The project has since struggled with a series of delays and cost hikes. The firm has now outlined three scenarios that push operations back until the end of the decade at the earliest.

The first reactor could begin operations in 2029, or, under a base case scenario that assumes delays in the electromechanical work and testing start-up, could fall back to 2030. Under a third scenario, there could be a further delay to 2031.

In a letter to staff, Stuart Crooks, managing director of Hinkley Point C, said: “Like other infrastructure projects we have found civil construction slower than we hoped and faced inflation, labour and material shortages on top of Covid and Brexit disruption.”

He added that EDF has been required to substantially adapt its reactor design to satisfy British regulations, requiring 7,000 changes that have added 35% more steel and 25% more concrete.

EDF says the delays and extra work will hike costs to between £31-35bn in 2015 values meaning under the worst case scenario the price could reach £46bn.

Hinkley Point C is key to the government’s target to almost quadruple nuclear power output from 6.5 GW today to 24 GW by 2050. To meet this goal, it published a plan earlier this month that includes building at least one other plant the size of Hinkley Point C and Sizewell C that EDF is planning in Suffolk, along with suites of smaller modular and advanced nuclear reactors…………….

News of the delay prompted further criticism from nuclear opponents who argue that governments should invest in renewables instead. There are also concerns that with the Chinese junior partner in Hinkley Point C refusing to contribute any more money to the project that the UK government will be called up on to help meet the climbing costs. A government spokesperson told the Financial Times that any additional costs “will in no way fall on taxpayers”.  

Government takes larger stake in Sizewell C

Earlier this week, the UK government announced it would make an extra £1.3bn available to support EDF’s construction of Sizewell C so that construction work can continue ahead of a final investment decision being made later this year. Sizewell will use the same design as Hinkley Point C.

The government’s investment further consolidates its position as the majority shareholder in the project. Last year, it bought out the project’s Chinese state-owned partner China General Nuclear as part of efforts to limit Beijing’s involvement in critical infrastructure.

The government has now invested £2.5bn in Sizewell C and the project is being funded by a so-called regulated asset base model under which surcharges on consumer energy bills help fund the project while it’s being constructed. Last year, the government opened up a bidding process to attract external investors in a bid to raise an estimated £20bn to construct the plant.  https://www.thechemicalengineer.com/news/hinkley-point-c-could-go-28bn-over-budget-as-edf-predicts-further-delays/

January 29, 2024 Posted by Christina Macpherson | business and costs, politics, UK | Leave a comment

Growing mountain of wasted money is a radioactive prospect

Alistair Osborne: Growing mountain of wasted money is a radioactive
prospect. Rishi Sunak’s apparent determination to press ahead with
mammoth investment in new nuclear reactors, whatever the cost, might not
prove to be the best solution.

It’s only a week since he set off — again — with his uncosted “nuclear road map”: a plan to have 24 gigawatts of new reactors by 2050, or seven more Hinkley Point Cs. On
Monday, the government sank another £1.3 billion into Sizewell C, so it
could “steam ahead” with that project, too, as Andrew Bowie, the
minister for nukes, put it.

Listen to him and investors are queueing up. So
what better news to encourage them than this jaw-dropper from EDF, the
state-backed French outfit behind both schemes? Hinkley Point’s costs
have shot up by as much as £10 billion to a top-end £35 billion, in 2015
prices.

And, instead of firing up in 2027, the first of the Somerset
nuke’s twin reactors could in an “unfavourable scenario” (the likely
outcome) be delayed until 2031. This is what comes with Hinkley’s
European pressurised reactor tech, as EDF has also proved at France’s
Flamanville, Finland’s Olkiluoto and China’s Taishan.

Indeed, two years after the Chinese nuke became operational, one unit had to be taken offline for a year’s repairs. So why is the government hellbent on a re-run with
Sizewell in Suffolk? Alison Downes from the Stop Sizewell C campaign is no
neutral voice. But she’s right to say the project “epitomises the
definition of insanity: doing the same thing over and over and expecting a
different result”. With Sizewell, though, things would be far pricier.
Under the contracts-for-difference regime, EDF is on the hook for
Hinkley’s costs. Repeat the trick at Sizewell and, under the new
regulated asset base model, consumers would find £10 billion added to
their bills — before the nuke’s even operational.

 Times 25th Jan 2024

https://www.thetimes.co.uk/article/24osborne-hzs6r76nf

January 28, 2024 Posted by Christina Macpherson | business and costs, politics, UK | Leave a comment

Hinkley Point C could be delayed to 2031 and cost up to £35bn, says EDF

As nuclear plant is hit by further delay, real cost will be far higher after inflation is included, as project uses 2015 prices

Guardian,  Alex Lawson, Wed 24 Jan 2024 

The owner of Hinkley Point C has blamed inflation, Covid and Brexit as it announced the nuclear power plant project could be delayed by a further four years, and cost £2.3bn more.

The plant in Somerset, which has been under construction since 2016, is now expected to be finished by 2031 and cost up to £35bn, France’s EDF said. However, the cost will be far higher once inflation is taken into account, because EDF is using 2015 prices.

The latest in a series of setbacks represents a huge delay to the project’s initial timescale. In 2007, the then EDF chief executive Vincent de Rivaz said that by Christmas in 2017, turkeys would be cooked using electricity generated from atomic power at Hinkley. When the project was finally given the green light in 2016, its cost was estimated at £18bn…………

Crooks said: “Running the project longer will cost more money and our budget has also been affected by rising civil construction costs. It is important to say that British consumers or taxpayers won’t pay a penny, with the increased costs met entirely by shareholders.”

EDF had previously said that the first reactor unit at the nuclear site would be due to be complete by June 2027, with a 15-month buffer period which was likely to be used – putting its completion at September 2028, and a further year for the second unit. It costs were estimated between £25bn and £26bn, and this was later revised up to £32.7bn in February 2023

EDF gave three scenarios, ranging from becoming operational is 2029, to delays pushing this back to 2031.

It said that the cost of completing Hinkley will be between £31bn and £34bn, although if completion is delayed to 2031 costs would rise to £35bn.

In December it emerged EDF’s partner in the project, China General Nuclear, had halted funding for Hinkley. The move came after the government took over CGN’s stake in Hinkley’s proposed sister site, Sizewell C in Suffolk, stripping the Chinese state-owned company of its role in the project.

The latest financial estimates are based on accounting in 2015 figures, meaning the total cost of the project could be far higher when inflation over the last decade is factored in. Hinkley’s ballooning costs have proved controversial with French taxpayers, which are picking up the tab.

Hinkley Point C and Sizewell C are expected to herald a new era of nuclear plants touted by the government.

Last year the government launched a delivery body, Great British Nuclear, with the aim of accelerating the development of new nuclear projects. Earlier this month ministers set out plans for out for the “biggest nuclear power expansion in 70 years”.

However, the Hinkley Point C delay will add to concerns over project delays and costs, as well as skills in an industry earmarked to deliver a quarter of the national electricity demand by 2050………………..

EDF said in January it would delay the shutdown of four of its UK nuclear reactors for at least two years and increase investment in its British nuclear fleet.  https://www.theguardian.com/business/2024/jan/23/hinkley-point-c-could-be-delayed-to-2031-and-cost-up-to-35bn-says-edf—

January 26, 2024 Posted by Christina Macpherson | business and costs, politics, UK | Leave a comment