Construction of the new Hinkley Point C nuclear power station has been delayed amid spiraling costs.
The cost of getting the nuclear power station built in Bridgwater, Somerset, has been hiked by £500million and the site now looks set to open in June 2026, instead of the end of 2025.
Developer EDF Energy, which is owned by the French state, said ‘significant progress’ had been made on the construction site, but admitted costs looked set to reach up to £23billion, rather than previous estimates of £22.5billion.
Delays: Construction of the new Hinkley Point C nuclear power station has been delayed
To date, the estimated costs involved in getting Hinkley Point C up and running are £5billion higher than five years ago, and the site will only start producing electricity nearly a decade after the originally planned launch date of December 2017.
Back in 2007, Vincent de Rivaz, the then boss of EDF, said: ‘EDF will turn on its first nuclear plant in Britain before Christmas 2017 because it will be the right time.’
He added: ‘It is the moment of the power crunch. Without it the lights will go out.’
Today, EDF said the latest delay and costs hike meant the expected rate of return from its investment would drop from between 7.6 per cent and 7.8 per cent to between 7.1 per cent and 7.2 per cent.
It added that a delay of nine to 15 months for Units 1 and 2 would cost around £700million and knock the rate of return by a further 0.3 per cent.
The group said the pandemic and sporadic lockdowns had pushed construction at the site back by three months, with the same period of delays expected this year.
The pandemic led to a number of changes on the Hinkley site, including reducing the number of workers to enable social distancing, and concentrating on the most critical areas of construction.
Where social distancing is not possible, workers have been using extra protective equipment.
In a video message to staff, Stuart Crooks, managing director of Hinkley Point C, said: ‘Ten months after it began, we are still facing the full force of the pandemic.’
World’s largest crane ready to start work at nuclear power station
The 400-acre site, which had around 5,000 workers on it before the pandemic struck, remains constrained by social distancing requirements.
Mr Crooks said he still had to ‘limit the number of people we can safely have on site at any one time.’
He added that none of the higher costs involved in getting the site built would end up being passed on to consumers.
EDF said in a statement: ‘Despite being affected by the COVID-19 health crisis, Hinkley Point C has made significant progress in 2020 on site, in the design execution plans and on the manufacturing of equipment.’
The project has been marred by rows over the cost to energy bill-payers and whether new nuclear should even be part of the country’s green energy network in future.
But, some business groups, like the Confederation of British Industry, have argued that sites like Hinkley Point C are essential as Britain cannot realistically look to solely rely on renewable energy sources like wind and solar.
The CBI has also thrown its weight behind EDF’s ambition to build the planned Sizewell C site in Suffolk, which is a replica of Hinkley Point C aimed at keeping costs down while other projects fall by the wayside.
The Government sees new nuclear as crucial to Britain’s mix of energy production.
Once completed, Hinkley Point C will generate electricity for around six million, or 7 per cent, of the country’s homes.
The Hinkley site reached a major milestone last summer, with EDF completing the 49,000-tonne base for the second reactor on schedule. This came less than a year after completion of the first reactor’s base in June 2019.
Recent figures show Hinkley Point C beat its plan to spend £1.5billion with regional businesses five years ahead of target.