The cost of building a new nuclear power station at Hinkley Point in Somerset could rise by nearly £2 billion, piling more pressure on the over-stretched finances of the French energy giant EDF, according to a report seen by The Times. An independent analysis of the £18 billion project claims that Areva, the French company that developed the EPR reactor earmarked for Hinkley, is repricing the technology before a final investment decision, which it expects to be signed by EDF and its Chinese partners in May. Michel Degryck, managing partner of the Paris-based corporate finance company Capitalmind and an expert on EDF who produced the report, said that Areva had in recent weeks been asking suppliers to resubmit detailed offers for key components of the Hinkley station. Mr Degryck said: “We understand that a number of costs were probably underesti mated when they did their last pricing [of the reactor] in 2013. They will have to take into account new costs . . . The cost of the project could rise by 10 per cent.” The updated price of the station could be as high as 25.3 billion euros (£19.8 billion), according to the research. The development casts further doubt on the future of the project, under which two new reactors to be built at Hinkley are set to generate 7 per cent of UK electricity once operational, probably in the late 2020s.
Times 31st March 2016 read more »
An EDF board member has called for the £18bn Hinkley Point C nuclear power station to be postponed, in the latest sign of discord at the top of the French energy company over the troubled project. Christian Taxil said a raft of changes to the Somerset reactor scheme agreed over the past three years significantly raised the risk for EDF, while a promise to commission the plant within 72 months of concrete being poured was “not credible”. Taxil, the first EDF board member to go public with his concerns, added: “Today I can only say that the conditions do not exist for me to give a positive opinion if such a project was submitted to me.” EDF dismissed the latest rows, saying that it was well known that the unions, who only hold six out of the 18 places on the board, are opposed to Hinkley, while the criticism from the engineers was contained in a paper that was not taken to the board. “The date for the first operation of Hinkley Point C has not changed. It will be 2025.”
Guardian 30th March 2016 read more »
FT 30th March 2016 read more »
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Herald 30th March 2016 read more »
EDF has insisted that its plans to complete the £18bn Hinkley Point C nuclear power station in Somerset by 2025 remain on track, despite reports that some of its engineers had called for a two-year delay and a redesign. It came as an EDF board member representing senior staff said in a letter to employees that he would vote against the controversial project. Christian Taxil, who represents the managers’ union CFE-CGC, is the first board member to go public with doubts about the project.
Guardian 30th March 2016 read more »
When did a major investment decision last go ahead successfully against the explicit advice of a company’s engineers? Politicians can dream up and try to force through projects, economists can put in place assumptions that make them look attractive, but in the end it is engineers who have to deliver. Their voice is decisive. That is the point we have reached in the tortuous saga of Hinkley Point. The latest judgment from EDF’s engineers is not surprising. Internal opposition to the project to build another reactor to the same design as those under construction in Flamanville in northern France and Olkiluoto in Finland has always been strong. If those projects have not been completed, why take on all the risks of another? Hinkley has never had the support of a majority of the EDF board. The difference now is that the doubts are out in public and can hardly be dismissed as co ming from anti-nuclear campaigners or people hostile to all things French. The simple fact is that serious professional engineers do not believe that Hinkley can be built to the present design. The logic now is for a long delay until at least one of the other reactors is on stream and until all the lessons of the technical problems and cost overruns can be learnt. Delay rather than abandonment makes sense because EDF will not be forced to crystallise its losses, a step that would weaken an already weak balance sheet. Delay will allow the company to consider other options for the Hinkley site, including the development of smaller, simpler reactors. For EDF, the biggest problem will be explaining to the Chinese who were due to fund part of the project why they have been kept in the dark for so long.
FT 31st March 2016 read more »
Letter Vincent de Rivaz: Your front page report “EDF dissidents urge delay to Hinkley Point nuclear project” (March 30) refers to an alleged document which you say is unsigned, so your readers cannot judge whether or not it has any credibility. However, I am happy to state the facts clearly and on the record. EDF has already delivered, over many years, a remarkable set of achievements which are the foundations for the project. In 2012, the UK nuclear regulator approved the design of the European Pressurised Reactor; in the same year, HPC was granted a nuclear site licence; in 2013, we were given planning consent and the contract for difference was agreed with the UK government. This contract was scrutinised and approved by the European Union in 2014; we signed a strategic investment partnership with our Chinese partners in 2015. EDF has recently been through a thorough risk review which is a normal process for any industrial project of this magnitude. EDF is therefore ready to go ahead with the next phase of this huge undertaking as soon as the final investment decision triggers it. As I said categorically at the energy and climate change select committee hearing last week, this project will go ahead and the investment decision will be made very soon. EDF is fully confident that it will deliver this project on time and on budget, thanks to the intense preparation of our committed and accountable engineering teams, the involvement of our supply chain, the experience gained from other projects and the unwavering engagement of many stakeholders, locally and nationally. Hinkley Point C will be operational in 2025. EDF has no plan whatsoever to change this date. HPC will provide low-carbon, reliable and competitive electricity at the very time the country needs it and will play a decisive role in Britain’s low-carbon energy mix for generations to come.
FT 31st March 2016 read more »