Hinkley C costs soar to £33 Billion
Posted: 18th February 2023
Hinkley C nuclear plant costs soar to £33bn. EDF blames inflation as nuclear plant budget spirals. The Hinkley Point C nuclear plant in Somerset could end up costing £33 billion thanks to inflation, its developer EDF has disclosed. The new estimate highlights the scale of funding that the embattled French energy giant will need to find to complete the project and will also increase fears over the costs of a proposed sister station at Sizewell C in Suffolk. Setbacks and delays at Hinkley Point C had already pushed its estimated cost to £25-26 billion, from £18 billion when the controversial project got the go-ahead in 2016. However, these figures were all expressed in 2015 prices, excluding the impacts of inflation, which has pushed up the price of everything from labour to raw materials. “Based on inflation indexes as of 30 June 2022, the estimated nominal cost at completion could reach £32.7 billion,” EDF told investors yesterday, adding that in 2015 prices the cost estimate was unchanged. Under a funding deal struck in 2016, the fixed price that consumers will pay for electricity from Hinkley has already risen automatically in line with inflation indices, although consumers will not pay extra for other cost overruns. Hinkley was once slated to start up by the end of 2025 but EDF said last year that first power was not expected until June 2027 at the earliest, with a risk of delay until late 2028.
Times 17th Feb 2023
Britain’s flagship nuclear plant scrambles to avoid cash crunch. Diminished Chinese involvement in UK’s nuclear plans leaves a gaping financial hole. The builder of Britain’s flagship new nuclear power station is scrambling to prevent a cash crunch as fears grow that its Chinese partner will withhold extra support. EDF said there is a high likelihood that state-owned China General Nuclear (CGN) will not want to contribute to a crucial fresh round of funding for the Hinkley Point C project in Somerset. It leaves EDF on the hook for billions of pounds at a time when the French state-owned business’s balance sheet has been stretched by outages on its nuclear fleet at home, which have worsened Europe’s energy crisis. EDF added that Hinkley Point C is now expected to cost £32bn owing to inflation, up from a previous estimate of £26bn. The project was initially expected to cost £18bn when approved in 2016. On Friday, EDF reported a record net annual loss for 2022 of €17.9bn (£15.9bn), compared to a profit of €5.1bn in 2021, owing to the lower nuclear output as well as a price cap on its sales imposed by the French government. Group net debt has climbed to €64.5bn from €43bn in 2021. The company already faces huge demand for its cash in France, with plans to build and maintain reactors expected to cost more than €80bn. The project was originally due to open in 2025 and cost £18bn, but has been delayed and is now expected to open in June 2027 and cost £25bn-£26bn, equivalent to £32bn at today’s prices given inflation. EDF and CGN have funded the project so far according to their stakes. But EDF said on Friday the cost overruns had triggered a mechanism under which shareholders will be asked for extra cash on a voluntary basis. It warned: “The probability that CGN will not fund the project after it has reached its committed equity cap is high. In the event that CGN would not allocate voluntary equity, the EDF Group would be required to contribute in place of CGN.”
Telegraph 17th Feb 2023
EDF faces shouldering more of soaring bill for Hinkley Point. Nuclear power station costs could rise to £32bn as French group warns Chinese partner may not meet extra payments. French energy group EDF has warned it could end up shouldering more of the soaring bill for nuclear power station Hinkley Point C as its Chinese partner may fail to meet its share of extra payments to finance the plant. EDF admitted on Friday that the cost of building the plant, a flagship project, could rise above £32bn when factoring in recent inflation levels, more than 20 per cent higher than its estimate last year closer to £26bn. As part of its original 2016 deal with CGN, the Chinese developer agreed to meet 33.5 per cent of the £18bn estimated for Hinkley Point C’s construction costs at the time, with EDF paying the remainder.
FT 18th Feb 2023
EDF: Inflation drives Hinkley Point C nuclear plant costs from £26bn to £33bn. The cost estimates are unchanged on 2015 prices when EDF made its calculations ahead of the 2016 funding deal for the plant, However, inflation has since pushed up the price of labour to raw materials, worsened by the pandemic and economic instability. Estimates for the cost in developing the power plant had already risen from £18bn to £26bn, while its completion date has stretched from 2025 to 2027.
City AM 18th Feb 2023
On Friday, EDF said that £25bn to £26bn remained the estimated cost based on 2015 calculations but “the estimated nominal cost at completion could reach £32.7bn” because of inflation.
Guardian 17th Feb 2023