Cost of Hinkley Point C rises by 8%, EDF says

EDF estimates the cost of the Hinkley Point C nuclear power plant project in the UK to now total £19.6 billion ($25.4 billion), up from its earlier estimate of £18.1 billion. The target date for first operation of unit 1 remains by the end of 2025.

EDF estimates the cost of the Hinkley Point C nuclear power plant project in the UK to now total £19.6 billion ($25.4 billion), up from its earlier estimate of £18.1 billion. The target date for first operation of unit 1 remains by the end of 2025.

An artist's impression of how Hinkley Point C could appear (Image: EDF Energy)

The company announced in its 2016 Annual Financial Report that it would carry out a full review of the costs and schedule of the Hinkley Point C project.

In a statement today, EDF said its latest estimate "includes successful operational action plans, in partnership with suppliers". The increase in costs "result mainly from a better understanding of the design adapted to the requirements of the British regulators, the volume and sequencing of work on site and the gradual implementation of supplier contracts".

EDF's projected rate of return on the project is now around 8.5% compared with the initial estimate of about 9%.

The pouring of first safety-related concrete for unit 1 of will be in mid-2019, EDF confirmed. However, it noted this assumes the final design, "which is on a tight schedule", is completed by the end of next year.

EDF said the risk of deferral of delivery is estimated at 15 months for unit 1 and nine months for unit 2. This risk, it said, would entail an additional potential cost of some £700 million. Under this assumption, the rate of return for EDF would be about 8.2%.

EDF Energy's new build subsidiary, EDF NNB Generation Company, "in compliance with its rules of governance, will study and implement the recommendations of the review".

Under a deal agreed in October 2015, China General Nuclear (CGN) will take a 33.5% stake in EDF Energy's project to construct Hinkley Point C, in Somerset, England. Consisting of two Areva-designed European Pressurised Reactors, it will be the first new nuclear power station to be built in the UK in almost 20 years and will provide about 7% of the country's electricity.

The final agreements enabling construction of two EPRs at Hinkley Point C to proceed were signed on 29 September last year by the UK government, EDF and CGN. These agreements included the contract-for-difference (CfD) and the Secretary of State Investor Agreement. The CfD - the ratepayer-backed guaranteed price for electricity generated by Hinkley Point C - was originally agreed in October 2013 and guarantees the plant will get £92.50 per MWh for for its first 35 years of operation. The signing of the agreements followed a long-awaited and positive final investment decision from the EDF board on 28 July.

The UK EPR design became the first reactor design to complete the country's Generic Design Assessment process and receive a Design Acceptance Confirmation from the Office for Nuclear Regulation (ONR) and a Statement of Design Acceptability from the Environment Agency, in December 2012.

In March, the ONR granted its first consent for the start of construction of a nuclear power plant at Hinkley Point C. The consent covers the placement of the structural concrete for the first nuclear safety-related structure at the site. It does not give consent for all elements of construction.

Researched and written
by World Nuclear News