EDF’s new nuclear plant in southwest England will likely cost approximately 20 percent more than its last budget estimate as inflation propels the price tag to almost GBP 32 billion (EUR 36 billion), EDF documents have shown according to the Financial Times.
The British integrated energy company owned by Électricité de France had warned in a results presentation on Friday that the cost of the Hinkley Point C project, Britain’s first new nuclear plant as of two decades, “could reach 32.7 billion pounds” based on inflation indexes from June 30, 2022.
Its previously published cost estimate in May 2022 had been EUR 29 billion.
The project’s price tag is often presented without inflation adjustment. When compared to the initial estimate, the latest increase makes for roughly an 80 percent hike from the 2016 quoted price which was approximately EUR 20 billion.
EDF is building the plant with China’s CGN, having a 33.5 percent stake in the project.
Britain plans to build new nuclear plants to boost its energy security, and to help meet the target for net zero emissions by 2050.
What do higher costs mean?
Under the companies’ agreement, the higher costs mean EDF can ask CGN to put more capital into Hinkley, but EDF has said “the probability that CGN will not fund the project after it has reached its committed equity cap is high.”
That would mean EDF would have to shoulder the additional costs in place of CGN.
EDF’s debt crisis
EDF is in the process of being nationalized by the French government, the first step in a plan to reinvest in its nuclear business and get the debt-laden company back on track.
Despite bringing a profit of more than EUR 1.2 billion from the UK, the company had reported a record net loss of EUR 17.9 billion. French Energy Minister Agnès Pannier-Runacher told RadioFrance on Saturday that the government remains fully behind the company.
Breaking: The UK arm of French energy firm EDF has announced its profits of £1.12 billion pic.twitter.com/hQ3KRHbVEn
— Good Morning Britain (@GMB) February 17, 2023
EDF is still adamant about launching the first of the Hinkley units on June 2027 but has warned there is a risk of a further 15-month delay to both units if government-imposed lockdowns or the war in Ukraine disrupt supply chains.
The project is already a decade overdue, with EDF having initially said it would be powering British homes by 2017.