Britain cannot just rely on state-backed enterprises like EDF and its Chinese partners to build a fleet of new nuclear reactors, Alan Raymant warns. By now, construction of EDF’s new nuclear reactors at Hinkley Point in Somerset was supposed to be well underway, ready to fill the looming energy supply crunch as old coal plants close. More reactors were supposed to be following on Hinkley’s heels, with 16 gigawatts – enough to meet about a third of peak winter UK electricity demand – up and running by 2025, replacing Britain’s existing nuclear plants as they retired. Instead, cash-strapped EDF is still to take a final decision on Hinkley, with the latest hoped-for decision date, this Tuesday, likely to be missed. First power from the Somerset plant is not due until 2025 and while other developers are aiming to start generating around the same time, they are years off investment decisions. Alan Raymant, chief operating officer of Horizon Nuclear Power admits that “the new nuclear programme is not going to sort out the short term challenges” but insists it is “absolutely critical” to addressing the supply gap that is looming in the longer-term. “The longer our project takes, the more pronounced that problem becomes.” Horizon has already been delayed: when Raymant took the role in 2009, it was a newly-created joint venture between German energy giants RWE and E.On, targeting first power by the end of this decade. But after Germany’s u-turn on nuclear power, the companies pulled out in 2012 and the venture was bought by Japan’s Hitachi for £700m. With new owners bringing a different reactor technology to the project – twin Advanced Boiling Water Reactors (ABWRs) with a combined capacity of 2.7GW – Horizon pushed its target for first power from Wylfa back to the “first half of the 2020s”. This remains the aim, Raymant confirms: “We are looking at 2024, 2025.” To do that, it needs to take a final investment decision on the plant in “early 2019”. That gives Horizon three short years to secure planning consent, safety approval for the ABWR design, a Government subsidy contract, EU state aid clearance, and the backing of investors. The biggest hurdle will be finding the money. If the UK wants to deliver 16 gigawatts of new nuclear – now by a revised target of 2030 – it is going to need to secure many tens of billions of pounds of investment. “We have to look to widen the pool of investors as far as we can,” says Raymant. “We can’t just rely on state-owned enterprises to provide that investment.” EDF set out to bring other investors on board: pension funds and Middle Eastern sovereign wealth funds were touted, but none signed up. “For third parties observing the announcements of delays and cost overruns for the EPRs [the Hinkley reactor technology] under construction, it is difficult to commit,” Jean Bernard-Levy, EDF chief, admitted. Only China’s state nuclear corporation has so far agreed to invest, taking a lower share than EDF had hoped and even then only in return for a red carpet invitation to build its own reactor technology at Bradwell. EDF also abandoned the idea of project-financing Hinkley, despite securing £17bn of Government loan guarantees; it has since emerged the loans had been awarded a sub-investment grade, BB+ rating by Infrastructure UK. EDF is now struggling to get the project over the line by funding its share from its own balance sheet.
Telegraph 14th Feb 2016 read more »