Électricité de France (EDF) says the construction cost of the UK’s Hinkley Point C NPP set to further increase to £32bn ($38.5bn). EDF revised its cost estimate in a presentation published alongside its annual results. In May, EDF raised the price for the two EPR reactors being built at Hinkley Point to £25-26bn. The plant was scheduled to begin operation in June 2027, but an additional delay of around 15 months is now possible, EDF warned.

Both EDF and project partner China General Nuclear Power Corp (CGN) will be asked to provide additional voluntary equity for the project. However, CGN is unlikely offer any additional funding for the project once a previously-agreed equity cap is met, EDF said. This means EDF may have to cover the increase. This is just the latest in a series of cost revisions since the initial estimate of £18bn when the contract was signed with the UK in 2016.

CGN was induced to take part in UK NPP construction in 2015 nuclear plants in 2015 by then-chancellor George Osborne as part of plans for a “golden era” in Anglo-Chinese relations. CGN initially planned to take part in three new NPP projects – Sizewell C, Hinkley Point C and Bradwell B. However, in 2022 it was bought out of Sizewell C by EDF with UK government funding amid concerns about Chinese involvement in sensitive infrastructure. As a result it is no longer expected to provide extra voluntary funding to Hinkley Point C and it almost certain to terminate any involvement in Bradwell B.

The UK government has undertaken to help finance Sizewell C, which EDF plans to build in Suffolk, with £700m, with the aim of attracting outside investors. EDF CEO Luc Remont said he was “delighted” with the UK investment but added that it was “too early” to say more.

Despite recently announced group level losses, EDF’s UK business made an underlying profit of £1.1bn, compared with a loss of £21m in 2021. This was partly the result of high electricity prices sparked by sanctions imposed on Russian energy. EDF Energy’s UK reactors generated 43.6 TWh of electricity, an increase of 1.9 TWh on 2021, despite the closure of the ageing Hunterston B and Hinkley Point B plants.

"This was due to strong operational performance, with delivery of outages broadly in line with plan," EDF said. "It also reflects sustained expenditure on maintenance and upgrades made to the stations in prior years, over £1.3bn across 2020-22."

In 2023, EDF Energy will operate five nuclear plants, four which are subject to statutory outages each lasting around 60-70 days. It said investment and maintenance expenditure of around £1bn is planned over the next three years "to help sustain output levels and help UK energy security, decarbonisation targets and the preservation of scarce nuclear skills".

A UK government spokesman said: “New nuclear power is essential to the UK’s energy security, providing clean and affordable homegrown power – this is why the government made a historic £700m investment to develop the Sizewell C project and become a project shareholder. “We will continue to work closely with EDF to bring Hinkley Point C to completion, the first new nuclear power station in a generation.”

Image: Construction costs for Hinkley Point C are set to increase, and an additional delay of around 15 months is now likely (courtsy of EDF)