Rising costs in the pipeline for nuclear power scheme
HINKLEY Point C – the nuclear power station being built in Somerset – is set to be delayed and costs are likely to be £500 million more than previously thought, according to the energy giant behind it.
EDF said “significant progress” has been made on the site in Bridgwater, despite the impact of the Covid-19 pandemic, but previous cost estimates of £21.5 billion to £22.5 billion have been revised up.
The cost is now expected to be in the range of £22 billion to £23 billion and the start of electricity generation from Unit 1 is now expected in June 2026, compared with an initially slated opening at the end of 2025.
Before the previous costings of £21.5 billion and £22.5 billion, the estimated price of the project had been £20.3 billion. Original estimates had been £18 billion.
Once completed, it will generate electricity for around six million, or 7%, of the country’s homes.
EDF said the delay and increased costs mean the expected rate of return from its investment will fall from between 7.6% and 7.8% to between 7.1% and 7.2%.
It added that a delay of nine to 15 months for Units 1 and 2 would cost around £700 million and knock the rate of return by a further 0.3%.
The Hinkley site reached a major milestone last summer, with EDF completing the 49,000-tonne base for the second reactor on schedule.
It came less than a year after completion of the first reactor’s base in June 2019.
The company said completion of the second reactor base benefited from experience gained on the first unit, which led to significant increases in productivity.
EDF said this will benefit the proposed follow-on project at Sizewell
C in Suffolk, where a deal is being negotiated with ministers for a site that could generate 3.2 gigawatts of electricity, enough to provide 7% of the UK’s energy demands.
The coronavirus crisis led to a number of changes on the Hinkley site, including reducing the number of workers to enable social distancing, and concentrating on the most critical areas of construction.
Where social distancing is not possible, workers have been using extra protective equipment.
Recent figures show Hinkley Point C beat its ambition to spend £1.5 billion with regional businesses five years ahead of target.