EDF Energy has warned this week that the cost of building two nuclear reactors at Hinkley Point near Burnham-On-Sea could reach nearly £21billion – about three billion more than it said in October.
The cost of the Hinkley Point C project includes a ‘contingency margin’ which could reach £13.8billion for EDF and £6.9billion for Chinese partner CGN, making a total of £20.7billion. In October, EDF put the total financing at £18billion.
Speaking on Thursday EDF added that the projected rate of return on Hinkley Point C is estimated at around 9 percent over the life of the project, but it said that every six months of delay would reduce the rate of return by about ’20 basis points’.
“We will do everything we can to make sure there is no delay,” Chief Executive Jean-Bernard Levy said at a meeting of shareholders.
The firm also said it expects it to take 9.5 years to complete the build of Hinkley C between a final investment decision until commissioning of the first reactor.
The final investment decision has been delayed several times and last month, French Economy Minister Emmanuel Macron said he expects a decision this September.
If the decision is taken in September, Hinkley C would start generating power in the spring of 2026.
In a further statement issued after the close of stock market trading on Thursday evening, EDF said it does not expect any additional costs beyond £18 billion and that contingency arrangements are normal practice for any construction project to ensure money is available “in case of more extreme scenarios”.
“We don’t expect to use the additional 15 percent (of equity) as we expect Hinkley Point C will be on time and on budget,” said the firm.
Other EPR reactors of the type that EDF plans to build in Britain have suffered years of delays and billions of cost overruns.