China is drawing up secret plans to build two nuclear reactors on the site of Hinkley Point in Somerset if the existing £21 billion deal collapses. The Chinese government has a “plan B” to bypass EDF, the French energy giant responsible for the project. China believes that it can build its own reactors on a faster timetable than the project run by EDF, in which they have made an investment, according to Lord Howell of Guildford, the former energy secretary and father-in-law of George Osborne. His statement will raise the pressure on the beleaguered Hinkley C project, which intends to supply about 7 per cent of Britain’s electricity. EDF announced yesterday that the project’s cost could increase from £18 billion to £21 billion, a 16 per cent increase since October. It also said that the project would not be completed before 2027, ten years later than originally planned. Building work would last at least nine and a half years once the project had been finally signed off. Last night Moody’s, the American credit agency, said that it was downgrading EDF’s rating to “negative” because of “incremental risks” associated with Hinkley C, and could further downgrade it if the project went ahead. Moody’s said: “The outlook could be returned to stable provided that EDF decides not to proceed.” Shareholders at EDF’s annual meeting yesterday criticised the Hinkley Point project. Jean-Paul Escoffier, a shareholder, told the board that he was “amazed” by a presentation from the company’s chairman, Jean-Bernard Lévy, which he said reflected a gap with reality. “You presented a world that seemed beautiful this morning,” Mr Escoffier said. Another shareholder, Nicolas Miguet, asked Mr Lévy: “Don’t you feel you are just carrying the bags for the Chinese with Hinkley Point?”
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An energy giant owned by the Chinese state has denied it plans to step in with a “Plan B” at Hinkley Point should a £21 billion deal with the French collapse. China General Nuclear Power Corporation (CGN) issued the denial after former energy secretary Lord Howell told the Lords the Chinese were prepared to “bypass EDF altogether” at the Hinkley C project in Somerset. CGN said a report in The Times that the Chinese had drawn up a plan to take over the site completely in the event the EDF pulls out was “without foundation”. The Chinese are currently seeking approval for their reactor technology from British regulators, whereas French designs have passed. A CGN spokesman said: “China General Nuclear Power Corporation has no plans to build nuclear reactors at Hinkley Point C. “Our intention is to obtain regulatory approval to build our reactor design at Bradwell in Essex.”
Press & Journal 13th May 2016 read more »
Chinese companies are ready to step in and offer to build new reactors at Hinkley Point in Somerset if French company EDF backs out of the government’s flagship energy project, it has been claimed. David Howell, father-in-law of George Osborne, told the House of Lords on Thursday night about Beijing’s intentions just as EDF faced even more opposition from its own private shareholders to the Hinkley scheme at its annual general meeting in Paris. The huge opposition inside EDF to Hinkley and problems with an EPR being built at Flamanville in France has led many – including apparently the Chinese – to question whether EDF will be forced to abandon the British project. The FT reported that one shareholder, Gilles Sauront, speaking at the AGM held in the Louvre art gallery, as saying: “Every decision has been terrible and it is us who are paying for it … The EPR project (in the UK) has no credibility.” The share price of EDF has been hammered as the uncertainty over Hinkley increased while cost overruns and delays increased at the Flamanville project.
Guardian 12th May 2016 read more »
EDF, the French utility group lined up to build Britain’s Hinkley Point nuclear reactor project, has made provision for costs to increase by £2.7bn to almost £21bn. In a statement before its annual general meeting, the struggling energy company said its ownership commitment on the project could rise from £12bn to £13.8bn. Its Chinese partner, CGN, could be liable for an extra £900m, taking its commitment to £6.9bn. AN EDF spokesman said the existing £18bn estimate contained contingency planning for general cost overruns and that the extra £2.7bn was to ensure the project was completed if there was an extraordinary or catastrophic event.
Guardian 12th May 2016 read more »
The cost of the Hinkley Point C nuclear plant could reach almost £21bn, £3bn more than planned, EDF has admitted, as it published a construction timetable suggesting first power could be delayed until 2026. EDF said in October that the cost of building the new twin reactor plant in Somerset would be £18bn. The French state-backed energy giant said it would provide £12bn of equity and Chinese investors CGN would provide £6bn. But EDF admitted on Thursday: “The partners’ equity commitment includes a contingency margin and could reach a total of £13.8bn for the EDF Group and £6.9bn to CGN.” In a document published ahead of its shareholder meeting, EDF also disclosed that the schedule for Hinkley “anticipates a 115 month construction period after the final investment decision until commissioning of the first reactor”. Amber Rudd, the energy secretary, declined to comment on the potential cost increase when asked by Labour’s Lisa Nandy in parliament on Thursday, but insisted that the project would go ahead.
Telegraph 12th May 2016 read more »
In a statement the company said the contingency needs of its project to build two nuclear reactors in Britain could increase the cost by about £3bn to £21bn. EDF also said on Thursday that it would commit to provide “limited” financial guarantees to CGN, particularly in the case of cost overruns related to delays to the project schedule, or in the event of a challenge to the CfD by European authorities. It did not specify the size of these guarantees.
Power Engineering International 12th May 2016 read more »
French utility EDF said on Thursday that contingency margins on its project to build two nuclear reactors in Hinkley Point, Britain could increase the cost by about three billion pounds to nearly 21 billion pounds ($30.27 billion). In a statement ahead of its annual shareholders’ meeting, EDF also said that it anticipates a 115 month construction period – five months short of 10 years – after the final investment decision until commissioning of the first reactor. EDF said in October that the Hinkley Point investment would be equity financed by EDF and its Chinese partner CGN with EDF’s share amounting to 12 billion pounds and CGN’s share 6 billion pounds. Thursday’s statement specified that each partners’ equity commitment includes a contingency margin and could reach a total of 13.8 billion pounds for EDF and 6.9 billion pounds for CGN.
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EDF also said it expects it to take 115 months (9.5 years) between a final investment decision until commissioning of the first reactor.
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Jean-Bernard Levy, chief executive of EDF, faced criticisms from irate minority shareholders, who expressed anger over Hinkley Point problems and the general performance of EDF. In the past 12 months, EDF’s shares have halved in value and been ejected from France’s main stock market index. As a result, the company’s 37bn euro net debt now dwarfs its market capitalisation – although it remains profitable. Gilles Sauront, a sharehold er speaking at the meeting in the Louvre art museum, said: “Every decision has been terrible, and it is us who are paying for it. The EPR project [in the UK] has no credibility.” Jacky Rousseru, a minority shareholder, said the EDF management had not got to grip with costs, and was unable to face up to the privileged unions – leaving shareholders with “no confidence in the company”. One shareholder in the packed conference questioned EDF’s claim that the Hinkley project would achieve a 9 per cent annual return for the company over its lifespan. “You say it is 9 per cent, but what devils are hidden in the contract?” the investor asked. “If it is so profitable, why not list it on the stock exchange?”
FT 13th May 2016 read more »
FOR months a profound somnolence has settled over Hinkley Point C, where the government hopes to install an £18 billion ($26 billion) nuclear power plant. On a recent weekend the security guards were not on the gate. Dozens of diggers and bulldozers were lined up as if on sale. A sign hung at the entrance displaying the core values of the project. One of them was “Know how far we’ve come, how far we’ve got to go, and how we’re going to get there.” In fact, no one has a clue when or how the world’s most expensive power station will get anywhere. EDF, the French contractor, has once again postponed a decision to go ahead—until September. There are growing fears that the French nuclear technology it intends to use is flawed. The British government, which has offered a huge subsidy to ensure that nuclear power helps keep the lights on and emissions down for decades to come, insists it will go ahead. But that conviction is shared only by local villagers, who shrug off the delays as a fact of life. “This is Somerset. We invented the word mañana and sold it to the Spanish,” a female Land Rover driver says jauntily. In the long-run there may be no option but to muddle through until renewables work without subsidies, and backup technologies such as battery storage or nuclear power become cheaper and more efficient. For now, the strain on the grid is lightened by feeble electricity demand in Britain, which is still more than 10% below its level before the financial crisis in 2008-09. But that could change if more people start plugging in their cars rather than filling them up, and switching on industrial plants rather than stoking their furnaces. The country with the cheapest and most abundant electricity will prosper in such a future. At this rate, it won’t be Britain.
Economist 14th May 2016 read more »