Hinkley Point C cost jumps as project delayed again

Hinkley Point C will cost as much as £35bn to complete and will come online up to four years later than planned, its French developer has said.

EDF on Tuesday said the cost of building Britain’s first new nuclear power station in a generation had risen by as much as £10bn after delays to construction and inflation to costs.

The French developer also warned that it will now take until at least 2029, or 2031 in a worst-case scenario, for the first of two reactors it is constructing at Hinkley Point C to open.

In 2022, the company said the project would cost £25bn to £26bn, and be delivered in 2027.

In a note to employees, Stuart Crooks, managing director for Hinkley Point C, said: “Like other infrastructure projects we have found civil construction slower than we hoped and faced inflation, labour and material shortages, on top of Covid and Brexit disruption.”

He said that the lifting of the first reactor’s dome into place “happened 24 months later than we planned when we began in 2016. Of that delay, 15 months was due to the global pandemic”.

The revision of the project’s budget and timetable is a blow to the Government’s net zero plans, with nuclear power expected to play a significant role in a carbon-free energy system.

Energy Secretary Claire Coutinho launched the Government’s long-awaited Nuclear Roadmap a fortnight ago, setting a target of 24 gigawatts (Gw) of nuclear power capacity by 2050. This equates to seven nuclear power stations the size of Hinkley Point C coming online by the middle of the century. Hinkley Point C will provide enough power for 6 million homes when it finally opens.

Martin Young, a senior analyst at Investec, said: “This delay has potential ramifications for energy security and it is possible that we could reach the end of the decade with only one nuclear power station (Sizewell B) in operation.

“It also continues to call into question the ability of the nuclear industry to deliver on time and on budget.”

Delays to Hinkley Point C come amid concerns about future funding for the project. China General Nuclear Power (CGNP), a junior partner in the project alongside EDF, halted payments towards the development last month, Bloomberg has reported.

EDF is believed to have lobbied the government for help to fund the project.

A Department for Energy Security and Net Zero spokesman said last night [TUES]: “Hinkley Point C is not a government project and so any additional costs or schedule overruns are the responsibility of EDF and its partners and will in no way fall on taxpayers.”

Hinkley Point C has been beset by delays and cost overruns from the start amid slow government decision-making and difficulties in the construction process.

In 2007, EDF’s then chief executive Vincent de Rivaz promised the plant would be ready in time for Christmas 2017, following backing for new nuclear plants by the Labour government.

By October 2010, the newly elected Coalition government had announced its commitment to Hinkley Point C, but it was not until September 2016 that official approval was given.

At that point, the power station was scheduled to open in 2025 with the cost of the project estimated to be £18bn.

On Tuesday, EDF said a completion date of 2029 for the first reactor assumed “target productivity for the electromechanical work, which action plans are being drawn up to achieve”. A 2031 completion date would only be the result of an “unfavourable scenario”.

The cost of completing Hinkley Point C is now estimated to be between £31bn and £34bn, though EDF cautioned that the “risk of an additional delay of 12 months… would result in an estimated additional cost of around £1bn”.

The figures, produced by EDF, are all in 2015 money, which allows the increasing costs to be compared without being distorted by inflation. The non-inflation adjusted estimate for the project’s cost now stands at £46bn, equivalent to almost £700 for every person in Britain.

The disclosures came a day after the Government committed an additional £1.3bn in funding for the construction of Sizewell C, a planned nuclear plant in Sussex owned by EDF and the Government. Taxpayers own a stake in the plant after the Government became uncomfortable with it being part-owned China General Nuclear.

Tom Greatrex, chief executive of the Nuclear Industry Association, said: “Hinkley Point C is the UKs most significant green energy project and represents the revival of an industry after a generation of not building any new plants.

“The more nuclear stations we build the quicker and cheaper it will become, so instead of building one plant at a time with long gaps in between projects, a programmatic approach, as outlined in the government’s Nuclear Roadmap, is vital to ensure we build expertise, maintain workforce capability and increase efficiency.”

Alison Downes of campaign group Stop Sizewell C said: “Hinkley Point C and Sizewell C epitomise the definition of insanity – doing the same thing over and over and expecting a different result.”