UK Nuclear Plant Cost Rises at EDF's Expense

The estimated cost of building the 3.2-GW Hinkley Point C nuclear power station in the UK, and the risk of being late, have both risen, but this will not affect the UK public, French state-owned EDF said September 25.

The UK government agreed a very high price for power from the plant, saying the plant was needed if the UK were to meet its carbon reduction goals. But despite arguments in favour of alternatives that were cheaper, the deal survived the scrutiny by the incoming Theresa May-led government in 2016. The agreement was signed three years ago.

The previously communicated risk of unit one and two of 15 months and nine months respectively has increased and the project completion cost is now estimated between £21.5 ($26.7)bn and £22.5bn, an increase of £1.9bn to 2.9bn compared with the previous estimate, it said. "The range depends on the effectiveness of action plans to be delivered in partnership with contractors," it said.

Cost increases reflect challenging ground conditions which made earthworks more expensive than anticipated, revised action plan targets and extra costs needed to implement the completed functional design, which has been adapted for a first-of-a-kind application in the UK context. But under the terms of the contract for difference, there is no impact for UK consumers or taxpayers. EDF’s project rate of return for Hinkley Point C is now estimated between 7.6% and 7.8%.  

The news follows EDF's discovery earlier this month of possible problems with 16 steam generators installed on six operating reactor units, all in France. "At this stage of the technical investigations being carried out on these components, EDF believes that the observed deviations do not adversely affect the components’ fitness for service and do not require immediate action," it said.

Responding to the Hinkley Point C announcement, energy workers' union Unite said: “The [UK] government needs to swiftly learn the lessons from the Hinkley Point project, to ensure that the new nuclear power building programme, which is desperately needed in order to keep the lights on is able to proceed and be expanded... We have already witnessed private sector companies pulling out of proposed new nuclear power stations in Cumbria and Anglesey, and the government’s hand wringing response is clearly inadequate."