Hinkley Point C costs soar again as EDF admits project delay risks have risen

EDF’s Hinkley Point C nuclear project is at greater risk of running 15 months behind schedule and could cost the firm up to £2.9 billion more than previously estimated, the French power giant has confirmed.

In a statement this morning, EDF said that following the milestone completion of the nuclear island ‘common raft’ in June this year, it conducted a detailed review of the costs, schedule and organisation of the project.

That review concluded that the previously-communicated risk of delay at units one and two – of up to 15 months – had increased, and that the project’s cost estimations had soared.

EDF now estimate the project completion cost to stand at somewhere between £21.5 billion and £22.5 billion, an increase of between £1.9 and £2.9 billion on previous estimates.

While UK consumers are protected from the increase in costs by means of the Contracts for Difference agreement the government signed with EDF, the increase in costs stands to have a serious impact on EDF’s rate of return on the project.

EDF has today guided that the IRR for Hinkley Point C now stands at between 7.6 and 7.8%. In July 2017, EDF said the IRR stood at between 8.5 and 9%.

A few years ago, at a solar investment conference in London, a major renewables financier told a room full of bankers and renewables developers he was willing to bet any sum of money that Hinkley Point C would never generate. It drew a rye smile from many of the crowd, but not one person was willing to take up the wager.

Read more: Current News

By |2019-10-07T16:40:08+00:00October 12th, 2019|Energy and Climate Change, National Grid, News, Power Generation|
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