Hinkley Point C nuclear project to run up to £2.9bn over budget

Yoana Cholteeva 27 September 2019 (Last Updated July 15th, 2020 23:34)

French energy company EDF recently announced that the construction of the Hinkley Point C nuclear power plant in Somerset, England will cost between £1.9bn and £2.9bn more than previous estimates.

Hinkley Point C nuclear project to run up to £2.9bn over budget
A model of Hinkley Point C, Somerset, England

French energy company EDF recently announced that the construction of the Hinkley Point C nuclear power plant in Somerset, England will cost between £1.9bn and £2.9bn more than previous estimates. EDF explained that the cost rise has been provoked by challenging ground conditions that made earthworks more expensive than expected. This increases the overall bill to between £21.5bn and £22.5bn, depending on the “effectiveness of action plans” in partnership with contractors. Furthermore, EDF has said that there is a higher risk of a delay in delivering the project’s milestones on time, although the aim to generate first electricity in 2025 remains unchanged.

In a letter to staff at EDF, Hinkley’s managing director Stuart Crooks said: “This is the country’s first nuclear plant for three decades. Restarting the new build industry hasn’t been easy or without its own costs, but we’ve done it and created thousands of skilled jobs for people and businesses in the South West and across Britain.”

“Getting this far has cost more money than we anticipated. Our earthworks are complete but challenging ground conditions meant we overspent to finish them on time,” Crooks added.

Hinkley ensured that under the terms of the Contract for Difference, the cost rise would not impact UK consumers or taxpayers as the project price surge will be completely covered by EDF.

As EDF is still determined that Hinkley will begin generating power from Unit 1 at the end of 2025, it has mobilised teams in Great Britain and France, along with buildings and ancillary works contractors, and suppliers of equipment and systems.

Nuclear Industry Association CEO Tom Greatrex says: “Being able to build Hinkley demonstrates that after having a generation without building anymore, we’re able to learn from all of the complications and experience. Even some of the frustrations from doing the first project will all help to reduce the risks and the cost of doing subsequent projects. So getting on with Hinkley is really important for future projects. This is also something which we know the public has a very strong interested in, seeing us reduce our emissions, and [Hinkley] is able to contribute to that.”

Hinkley is the UK’s first nuclear plant for 30 years and is being built in a partnership with China General Nuclear Power. The plant has a planned capacity of 3,200MW and is expected to provide around 7% of the UK power needs. The projects nuclear island’s “common raft” for its first unit was finished on time in June 2019, in line with the schedule announced in September 2016. The next confirmed milestone is the completion of the common raft for Unit 2 in June 2020.