EDF has once again revised up estimates for the total cost of its Hinkley Point C nuclear power station, blaming the coronavirus pandemic for delays which will add £500 million to the bill and push the launch of the plant back to 2026.
The French utility giant initially projected the development would cost a between £19.6 billion and £20.3 billion, before adjusting the estimate to £22.9 billion in 2019. The most recent revision would take the total cost to close to £23.5 billion. However, this figure is quoted in 2015 prices in order to maintain consistency for the markets. The true cost, accounting for inflation, will be even higher.
EDF attributed the increased cost to the postponement of construction during the first months of the coronavirus pandemic last year and to continuing social distancing requirements, which limit the number of people who can work onsite.
In a video message to employees Wednesday, Stuart Crooks, managing director of Hinkley Point C, said: “Ten months after it began, we are still facing the full force of the pandemic.”
Even though EDF has been able to increase the number of workers at the 160-hectare site in Somerset from under 2,000 to more than 5,000 recently, “social distancing requirements still limit the number of people we can safely have on site at any one time,” he said.
The delays and limited staffing means less efficient working and a longer construction period, with associated costs, he explained.
EDF now anticipates the 3.2GW plant will start generating electricity in June 2026, six months later than the previous target of the end 2025—and much later than the 2017 date once promised.
The first new nuclear power stations built in the UK since 1995 and the first of a new generation of nuclear plants planned, Hinkley Point C has already drawn criticism for its colossal price tag. Even before the recent revision, it was already one of the most expensive energy projects ever undertaken.
However, Crooks insisted the most recent cost increase won’t fall on UK energy billpayers. It will instead be shouldered by EDF, which has already agreed a strike price of £92.50 for every megawatt-hour (MWh) of electricity produced by the plant. The delays won’t impact the per-unit price.
But even at that unit price, the project will add between £10 and £15 to the average household annual energy bill for 35 years. The National Audit Office has previously estimated that the plant's electricity will ultimately cost consumers £50 billion.
Environmental campaigners have pointed out that the per-unit price of Hinkley Point C’s electricity will be several times that of renewable resources. By the government’s own estimates, large-scale solar PV installations will produce electricity at £44/MWh in 2025, around when Hinkley Point C comes online. But by 2040, just 15 years into Hinkley Point C’s 60-year lifespan, the cost of solar power will fall to just over a third of Hinkley’s electricity: £33/MWh.
EDF, which is developing the plant with junior partner China General Nuclear (CGN), is still expected to make a 7.1% to 7.2% return on its investment in Hinkley Point C.
The government is currently in talks with EDF and CGN about the financing of another plant on the Sizewell site in Suffolk. The government is reportedly considering taking a stake in the £20-billion plant, especially if CGN pulls out of the project over security concerns.
The nuclear industry has vowed that the lessons learned at Hinkley Point C will reduce the costs of future plants, including Sizewell C, by 30%.
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