U.K. Nuclear Project Hits Delays, Costs Rise by $1.9 Billion

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The U.K.'s first new nuclear project in 25 years is running more than a year behind schedule and will cost an extra £1.5 billion ($1.9 billion) to construct.

Developer Électricité de France SA (EPA:EDF) (Paris, France) confirmed the delays and cost overruns for the Hinkley Point C plant in Somerset, southwest England. The plant will use two European Pressurized Reactors (EPR) reactors that will give Hinkley Point C a generating capacity of 3,300 megawatts (MW), enough to meet 7% of the U.K.'s future electricity needs.

EDF stated: "The project's termination costs are now estimated at £19.6 billion, an increase of £1.5 billion compared to previous assessments. This estimate integrates the success of operational action plans, in partnership with suppliers. Estimated incremental costs result mainly from a better understanding of the design, adapted to the demands of the regulators, the volume and sequencing of the work on site and the gradual introduction of supplier contracts. EDF's projected rate of return (IRR) is now estimated at about 8.5% compared to about 9% initially."

It added that it expects that the first reactor unit will run 15 months late, pushing its star-up date from the end of 2025 to sometime in 2027. The second unit is expected to be delayed by nine months. Despite the warnings, Vincent de Rivaz, chief executive of EDF Energy in the U.K., was adamant that it is still aiming for the 2025 deadline, with the company on track to pour the concrete for the first reactor in 2019.

The project has been stop-start for years, originally proposed in 2007 with a then commissioning date of 2017. The U.K. needs new nuclear power to help replace its existing nuclear fleet, which will be decommissioned over the coming decade. Delays to Hinkley may result in extensions for older plants. The current Hinkley project saw final contracts signed by the government and EDF last October. For additional information, see October 6, 2016, article - All Systems Go for Hinkley Point C Nuclear Project.

EDF has awarded a number of contracts already to: AREVA S.A. (EPA:CEI) (Paris, France) (nuclear steam supply system, instrumentation and control), Alstom S.A. (OTC:ALSMY) (Paris, France) (turbines) and Alstom U.K. (services during operations), Bouygues TP/Laing O'Rourke (main civil works) and BAM Nuttal/Kier Infrastructure (earthworks).

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