UK nuclear plant hit by new multiyear delay and could cost up to £46bn

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Britain’s flagship Hinkley Point C nuclear plant has been delayed until 2029 at the earliest, with the cost spiralling to as much as £46bn, in the latest blow to a project at the heart of the country’s long-term energy plans.

The surging bill and slipping schedule, announced on Tuesday by the French state-owned operator and constructor EDF, will put pressure on the UK government to provide extra financial support for the project. 

EDF, which has also experienced long delays on recent parallel projects in Finland and France that use the same reactor technology, blamed the latest problems at Hinkley in Somerset on the complexity of installing electromechanical systems and intricate piping. Hinkley was previously delayed due to construction disruption during Covid pandemic.

Under EDF’s latest scenario, one of the two planned reactors at Hinkley Point C could be ready in 2029, a two-year hold-up compared with the company’s previous estimate of 2027. But it could be further delayed to 2031 in adverse conditions, EDF said. It did not give an estimate for the second reactor. 

EDF said the cost would now be between £31bn-£35bn based on 2015 prices, depending on when Hinkley Point C was completed. In today’s prices, the cost would balloon to as much as £46bn. The initial budget was £18bn, with a scheduled completion date of 2025.

Hinkley is expected to provide power to more than 5mn UK homes, and is crucial for the country’s future energy provision.

The twin-reactor scheme in Somerset is the first in a new generation of nuclear power stations intended to provide “baseload” electricity as the UK becomes more reliant on intermittent renewable energy from the wind and the sun. 

The latest setbacks at Hinkley come amid broader concerns among some critics of the nuclear industry over whether the sector is well equipped to deliver on time and on budget in the decades to come.

More nuclear plants are planned in Britain, including the Sizewell C nuclear project in Suffolk, which is also led by EDF. 

Experienced workers left the industry after a lull in projects following the 2011 Fukushima nuclear accident in Japan, and labour shortages were one of the issues at Hinkley, a person close to the project said. 

“We have found civil construction slower than we hoped and faced inflation, labour and material shortages,” EDF said in a note to Hinkley project staff. 

The project was slow to get going. The then chief executive of EDF, Vincent de Rivaz, had boasted in 2007 that by 2017 Britons would be able to cook their Christmas turkeys using electricity from Hinkley. 

There have also long been concerns over Hinkley’s budget: in 2016 EDF’s then finance chief resigned over the decision to press on with the project, saying it would put the company’s financial future in jeopardy. 

EDF was fully nationalised by France’s government last year, in part because of huge losses after it suffered outages at domestic reactors, and was also made to foot the bill for shielding French households from power price rises during Europe’s energy crisis.  

The latest Hinkley cost overruns pose further financial problems. EDF’s junior investment partner on the project, CGN of China, had agreed to finance 33.5 per cent of the original cost. 

But after paying its contracted share, the Chinese group is refusing to make further contributions related to cost overruns at Hinkley after it was in effect pushed out of other UK nuclear schemes, including Sizewell, as relations between London and Beijing deteriorated. 

EDF and the French government were seeking ways for Britain to fund the higher construction costs at Hinkley, people close to the discussions have said.

But a UK Department for Energy Security and Net Zero spokesperson said on Tuesday: “Hinkley Point C is not a government project and so any additional costs or schedule overruns are the responsibility of EDF and its partners and will in no way fall on taxpayers.”

Alison Downes of Stop Sizewell C, a campaign group opposed to the planned Suffolk nuclear plant, said EDF was an “unmitigated disaster”.

She added the UK government should cancel Sizewell C, saying state funding for the project could be better spent on “renewables, energy efficiency or, in this election year, schools and hospitals”.