EDF has told investors that the cost of building Hinkley Point C nuclear plant near Burnham-On-Sea could soar to almost £33bn – a near 30 per cent hike on previous estimates of £26bn.
The French energy giant has revealed costs for the behind schedule, over-budget project have been bloated by inflation.
EDF says in a new statement: “Based on inflation indexes as of 30th June 2022, the estimated nominal cost at completion could reach £32.7bn.”
Estimates for the cost in developing the new power plant had already risen from £18bn to £26bn, while its completion date has stretched from 2025 to 2027.
EDF has committed £13bn of investment over the next three years to completing the power plant – and consumers are not on the hook for construction overruns.
It says the cost estimates are unchanged on 2015 prices when EDF made its calculations ahead of the 2016 funding deal for the plant, however, inflation has since pushed up the price of labour to raw materials.
The price of electricity from Hinkley Point C will rise in line with inflation.
The government is targeting a ramp up from 7GW to 24GW as part of its energy security strategy following Russia’s invasion of Ukraine.
Hinkley Point C could generate enough electricity to power six million homes, but funding will be more difficult for EDF in the coming years, with Chinese state nuclear group CGN unlikely to provide more money to support the project.
The company has a one-third stake in Hinkley, but its contractual funding commitments are expected to be exceeded this year according to financial media reports.
This means EDF will have to contribute the remainder of the project costs – with the firm smarting from record £4.4bn losses following the French government’s intervention in the energy crisis.