Hinkley delay fuels worries over energy bills

FAMILIES face higher energy bills if Britain’s future nuclear plants suffer similar delays to Hinkley Point. France’s stateowned EDF said late on Thursday that the Hinkley Point C project it is building in Somerset will cost £25bn-£26bn and not be up and running until June 2027.

It marks the fourth budget increase for the project since it signed a funding deal with the government in 2016, when it was set to cost £18bn and be ready by 2025. The company blamed the pandemic for adding to costs and constraining staffing, but could not rule out further delays.

Under the funding model for Hinkley, EDF will get a guaranteed price of £92.50 per MWH for the first 35 years once it starts generating, funded by a levy on bills – but EDF itself bears the cost of overruns.

EDF is in negotiations with the Government over a second nuclear plant, Sizewell C, which is set to use a different financing model in which the risks of overruns are shared with consumers and taxpayers.

Ministers are keen on the model as it is supposed to push overall costs down by lowering risk and therefore the costs of financing. However, critics raise concerns about passing those risks to consumers.

Andrew Newbury, a partner at law firm Gowling WLG, said: “Under the arrangements contemplated … the consequences of a similar cost increase at Sizewell would affect the British consumer as a pass through to them in higher electricity bills.”

The campaign group Stop Sizewell C said Hinkley Point C’s “rocketing costs should send investors considering Sizewell C running for the hills”. It added: “EDF once again has to suck up this price hike, but Sizewell C’s will fall on consumers. Sizewell C is risky, expensive and in no one’s interest except EDF’S.”

EDF argues Sizewell C is “unlikely” to face the same challenges as it is a “copy” and can apply lessons learned. “Legislation passed a few weeks ago will unlock cheaper financing for the project, bringing significant savings for bill-payers,” it added. “Both projects are vital if Britain is to become more self-sufficient in energy and less reliant on imported gas.”

A government spokesman said: “This project would benefit from the lessons already being learned and the supply chain established at Hinkley Point C, meaning it could be delivered at faster pace and lower cost. Our new funding model could reduce the cost by more than £30bn.”