The Times on Hinkley and Sizewell

Over time, over budget… will our new nuclear plants ever be built? A damning report on EDF, the French company aiming to construct Sizewell C, has thrown the project into doubt, while Hinkley Point C faces soaring costs and delays. The cost of nuclear power in the UK came roaring back into the headlines last week after reports that the final bill for Sizewell C, the planned new power station on the Suffolk coast, would be £40 billion — twice what was initially expected. This was followed by a damning report on EDF, the French state-backed company that is proposing to build Sizewell, which laid bare its financing problems, raising questions about whether the plant will be built at all. Hinkley is running years late and is massively over budget, prompting critics to wonder whether this is a model we should be copying. EDF had originally envisaged that [Hinkley] would be in operation by this year; its most optimistic scenario now puts the start date for the first of its two reactors at 2029. Meanwhile, Hinkley’s original £18 billion cost on the eve of its construction has ballooned to up to £35 billion in 2015 prices — or £46 billion in today’s money. Unfortunately, the financing for both plants is far from settled. It is estimated that cost overruns at Hinkley mean it needs to find another £5 billion to finish the work. This shortfall has been exacerbated by EDF’s partner in the project, China General Nuclear Power, refusing to put in more money after being excluded from Sizewell on national security grounds. Alison Downes of the Stop Sizewell C campaign said: “We’ve no faith this project is being looked at objectively, so it’s vital that the Office for Value for Money [the new government agency] launches an immediate inquiry before ministers sleepwalk into a disastrous decision.” Having allocated £5.5 billion to Sizewell in the budget, most observers expect Labour to give the green light at the spending review. Some argue that the “sunk-cost fallacy” — a reluctance to abandon projects in which a lot of money has been invested, even if that would ultimately be a more cost-effective option — has kicked in, and that cancelling it now would trigger a large and galling write-down for the government. Nor are there obvious alternative vendors of large nuclear projects — at least not yet. Bull, of Manchester University, said axing Sizewell would send a terrible signal: “I think the real cost of not doing Sizewell C is that we end up with another failed project, and investors start to think we are just not serious.”