Yahoo Finance Hinkley nuclear costs climb as deadlines slip again
EDF is bracing for a multi-billion euro rise in costs at its Hinkley Point C nuclear site after a fresh evaluation of the project revealed yet another likely delay. An internal review of the troubled project by senior executives at EDF’s French headquarters is expected to confirm fears that the state-backed energy giant will not be able to deliver Hinkley on time or in line with its £18bn budget.
The French newspaper Le Monde reported over the weekend that sources close to the review have said no one believes it can be delivered by 2025.
Instead, the start-up date is likely to be 2027 and pile a further €1bn (£870m) to €3bn euros on to the construction costs of the £18bn project.
The review is being led by Jean-Michel Quilichini, the group’s audit director, and is expected to be made public later this summer.
A UK spokesman for the company declined to comment.
The latest delay is likely to fuel concerns that Government has locked energy bill payers into “a high cost and risky deal” that could fail to deliver on its economic promises.
To guarantee the project’s revenue, EDF will be granted a top-up payment to reach £92.50 per megawatt-hour, more than double the current wholesale market rate, through a levy on energy bills.
The National Audit Office warned last week that consumers could be locked into paying a higher than expected price for a high-risk gamble and uncertain economic benefits.
It is the second stark warning from the public spending watchdog, which reported last year that EDF’s top-up payments have quadrupled from £6bn to £30bn as wholesale market prices continue to slip.
The latest climb in costs will not change the agreed “strike price” energy consumers must meet, but it is expected to reignite concerns that the project is a political gamble not worth taking. In 2007 Vincent de Rivaz, the chief executive, said he hoped the new Hinkley Point reactors would provide electricity for Britons to cook their Christmas turkeys in 2017.
At the time, Hinkley had an estimated cost of £12.5bn. These projections have slipped several times in the last 10 years and its latest estimate pinpointed 2025 as the expected start date for the first new nuclear power plant in a generation.
The latest blow to the project comes weeks after EDF made the shock announcement that Mr de Rivaz will step down in September.
