Hinkley Point C delays raise 'big questions' about nuclear power, says RWE chief

Cost overruns and delays at Hinkley Point C raise “big questions” about investment in new nuclear power projects, the chief of one of Britain’s biggest power producers has warned.

Markus Krebber, chief executive of RWE, has raised doubts about whether investors would and should back new nuclear plants as part of the shift to net zero.

He told the Australian Financial Review: “I would have a big question mark whether building new ones is really a good strategy, because if you look at the cost overruns and the delays, I think purely a renewables-based energy system, including the necessary storage, is probably in most of the regions already today cheaper than new nuclear.”

His comments come as Britain’s flagship Hinkley Point C nuclear power station remains under construction after a series of setbacks.

The Somerset-based project received Government approval in 2016 and was initially supposed to open in 2025 and cost £18bn.

However, the 3.2 gigawatt producer is now expected to open in June 2027 and cost between £25bn-£26bn, equivalent to £32bn at today’s prices given inflation.

The project, designed to generate enough power to supply power to 6m homes, is being built by France’s EDF, which owns Britain’s ageing nuclear power fleet.

Mr Krebber highlighted the delays to the project as a reason why it was challenging to find “anybody in the Western world” who will invest in building new large nuclear plants without receiving support from governments.

He said: “You have seen the delays and the cost overruns in the US, in Finland, in the UK and France.”

Nuclear power is seen as vital to Britain’s energy security following the instability in global oil and gas markets since the outbreak of war in Ukraine. Nuclear provides a reliable source of electricity and has helped to insulate France from the worst effects of surging oil and gas prices.

Ministers have called for nuclear to produce 25pc of the UK’s electricity needs by 2050, ending its reliance on coal and gas.

However, Hinkley Point C is the only major nuclear project which has entered construction in the past two decades.

The Government has struggled to convince sceptical pension funds and asset managers to invest in the planned £20bn Sizewell C nuclear power station in Suffolk.

It has invested nearly £1bn into the project and shares equal ownership with EDF, after buying out a state-owned Chinese nuclear power company last year amid national security concerns.

RWE was previously one of Germany’s largest producers of nuclear power but was required to shut down production as part of the country’s long-running phase out of nuclear energy. It closed its final nuclear plant in April.

The Hessen-based company, which is now the world’s second largest generator of offshore wind power, supplies about 15pc of the UK’s electricity demands.