Bill for Hinkley nuclear plant soars by £1.5bn as delays loom
The controversial Hinkley Point C power plant is already running £1.5 billion over budget and faces significant delays after consortium leader EDF admitted the work was more complicated than anticipated.
The plant, approved by Prime Minister Theresa May last September, is now expected to cost about £19.6 billion after the French energy giant said it had a “better understanding” of the project.The completion date of the site in Somerset could also overrun by up to 15 months past a 2025 deadline, adding £700 million of costs.
“The estimated additional 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,” the French firm said.
The delay is likely to prompt further criticism of the project, which has been attacked over its cost and necessity. The National Audit Office warned last month that consumers could have to pay an estimated £30 billion, up from £6 billion, over the next 35 years to help subsidise the scheme.
It added that the case for the project had “weakened” since the idea was put forward in 2013. Hinkley is set to be the UK’s first nuclear reactor for a generation, and it is estimated that it will provide 7% of the UK’s electricity needs over the next 60 years.
Development of the site became an early policy battle for May when she took over last year. The Government initially caused concern about further delays after she launched a review into the project, but she eventually gave the green light in September.
French giant EDF is leading the consortium to develop the site, backed by Chinese firm China General Nuclear Power Group.
Shares in EDF were flat at 9.49, after falling in early trading, despite an expected drop in its returns.
French newspaper Le Monde last week reported that EDF was planning for costs spiralling by between £1 billion and £3 billion alongside a two-year delay.
The City has been less conservative, with Barclays analysts recently forecasting cost overruns of around £4.5 billion and a four-year delay to the project .
EDF Energy, the UK arm of the French company, recently gave a separate progress update on the site to coincide with the six month anniversary of the first construction contracts being signed.
Concrete has already been poured for the power station galleries. Construction of the first reactor is due to start in 2019.
Hinkley Point C project director Philippe Bordarier said the concrete pour was a “significant milestone” for the site.
“It is the outcome of many years of preparation and hard work from all our teams and supply chain across the UK and France,” he added.