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Released February 05, 2024 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The U.K.'s only new nuclear power plant project, Hinkley Point C, is facing new delays of up to four years and a potential price hike of up to a third, bringing the eventual cost to £46 billion (US$58.4 billion).
The sobering update from French developer Electricité de France (EDF) (Paris, France) comes just weeks after the U.K. government unveiled a plan that would herald the country's biggest expansion in nuclear capacity in 70 years. For additional information, see January 19, 2024, article - U.K. Promises Biggest Nuclear Expansion in 70 Years.
EDF has always expressed prices in 2015 prices--when the initial projections first started--for easier comparisons. At that time, costs were put at £18 billion (US$22.9 billion), with a 2025 startup date. In 2022, the price tag for the Hinkley project was then upped to £26 billion (US$33 billion), with a target date for completion of the first reactor, Unit 1, in June 2027. The latest figure now puts that cost at up to £34 billion (US$43.2 billion)--in today's money and accounting for higher prices and inflation, that's £46 billion (US$58.4 billion). The company is now aiming for a start date for its Unit 1 reactor by the end of the decade.
"A review of the Hinkley Point C project has been finalized and has led to the following re-evaluation of the schedule and costs," EDF stated. "The aim of the project is to bring Unit 1 into service around the end of the decade. Several scenarios have been analyzed--the first scenario around which the project is organized is targeting becoming operational in 2029. This schedule is based on a target productivity for the electromechanical work, which action plans are being drawn up to achieve. A second scenario (base case), which assumes certain risks inherent in the ramp-up of the electromechanical work and the testing schedule do materialize, would see Unit 1 operational in 2030."
It added: "Finally, given the complexity of the project, an unfavorable scenario assuming a further 12-month risk materializes which could lead to Unit 1 being operational in 2031. The cost of civil engineering and the longer duration of the electromechanical phase (and its impact on other work) are the two main reasons for this cost revision. If the risk of an additional delay of 12 months mentioned above in the final scenario does materialize it would result in an estimated additional cost of around £1 billion (US$1.3 billion) in 2015 values."
The project has faced severe delays and labor shortages due to supply chains being disrupted during the COVID-19 pandemic. In a letter to employees, quoted by the BBC, Stuart Crooks, the managing director of Hinkley Point C, said that there were 7,000 substantial design changes required by British regulations that needed to be made to the site, with 35% more steel and 25% more concrete needed than originally planned. "Going first to restart the nuclear construction industry in Britain after a 20-year pause has been hard," Crooks wrote. "Like other major infrastructure projects, we have found civil construction slower than we hoped and faced inflation, labor and material shortages, on top of COVID and Brexit disruption."
All of the cost overruns will be shouldered by EDF and its partners, but it is a serious blow to the U.K. government's ambitious plan to resurrect its aging nuclear fleet. The recently announced Civil Nuclear Roadmap calls for the construction of "a large-scale nuclear plant" on a site yet to be identified that will quadruple energy supplies by 2050, up to 24 gigawatts (GW). It would be enough to provide a quarter of the U.K.'s electricity needs. Nuclear power currently supplies around 15% of the U.K.'s total power from five active plants that supply roughly 6.5 GW. However, most of those plants will be offline well before the end of the decade.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
The sobering update from French developer Electricité de France (EDF) (Paris, France) comes just weeks after the U.K. government unveiled a plan that would herald the country's biggest expansion in nuclear capacity in 70 years. For additional information, see January 19, 2024, article - U.K. Promises Biggest Nuclear Expansion in 70 Years.
EDF has always expressed prices in 2015 prices--when the initial projections first started--for easier comparisons. At that time, costs were put at £18 billion (US$22.9 billion), with a 2025 startup date. In 2022, the price tag for the Hinkley project was then upped to £26 billion (US$33 billion), with a target date for completion of the first reactor, Unit 1, in June 2027. The latest figure now puts that cost at up to £34 billion (US$43.2 billion)--in today's money and accounting for higher prices and inflation, that's £46 billion (US$58.4 billion). The company is now aiming for a start date for its Unit 1 reactor by the end of the decade.
"A review of the Hinkley Point C project has been finalized and has led to the following re-evaluation of the schedule and costs," EDF stated. "The aim of the project is to bring Unit 1 into service around the end of the decade. Several scenarios have been analyzed--the first scenario around which the project is organized is targeting becoming operational in 2029. This schedule is based on a target productivity for the electromechanical work, which action plans are being drawn up to achieve. A second scenario (base case), which assumes certain risks inherent in the ramp-up of the electromechanical work and the testing schedule do materialize, would see Unit 1 operational in 2030."
It added: "Finally, given the complexity of the project, an unfavorable scenario assuming a further 12-month risk materializes which could lead to Unit 1 being operational in 2031. The cost of civil engineering and the longer duration of the electromechanical phase (and its impact on other work) are the two main reasons for this cost revision. If the risk of an additional delay of 12 months mentioned above in the final scenario does materialize it would result in an estimated additional cost of around £1 billion (US$1.3 billion) in 2015 values."
The project has faced severe delays and labor shortages due to supply chains being disrupted during the COVID-19 pandemic. In a letter to employees, quoted by the BBC, Stuart Crooks, the managing director of Hinkley Point C, said that there were 7,000 substantial design changes required by British regulations that needed to be made to the site, with 35% more steel and 25% more concrete needed than originally planned. "Going first to restart the nuclear construction industry in Britain after a 20-year pause has been hard," Crooks wrote. "Like other major infrastructure projects, we have found civil construction slower than we hoped and faced inflation, labor and material shortages, on top of COVID and Brexit disruption."
All of the cost overruns will be shouldered by EDF and its partners, but it is a serious blow to the U.K. government's ambitious plan to resurrect its aging nuclear fleet. The recently announced Civil Nuclear Roadmap calls for the construction of "a large-scale nuclear plant" on a site yet to be identified that will quadruple energy supplies by 2050, up to 24 gigawatts (GW). It would be enough to provide a quarter of the U.K.'s electricity needs. Nuclear power currently supplies around 15% of the U.K.'s total power from five active plants that supply roughly 6.5 GW. However, most of those plants will be offline well before the end of the decade.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
