Warning over further Hinkley Point delays

The only nuclear plant under construction in Britain is at growing risk of further delays and cost overruns, its French developer has warned.

When the Hinkley Point C plant in Somers got the go-ahead in 2016, first power was expected in late 2025. That then slipped to June 2027 at the earliest, with the potential for a further 15-month delay.

Now, however, the French state-controlled energy group has warned that “the risk of additional delays and budget overruns is increasing”. EDF, which said in February that the cost of the project could spiral to £32.7 billion, gave no further details alongside its latest alert, which was issued within a presentation to investors in recent weeks, and a spokesman for the group declined to comment.

Sir Keir Starmer, the Labour leader, visited the site yesterday and said the project should move forward at pace and the country had a “once-in-a-generation opportunity now to seize the jobs of the future”.

The threat of yet more delays to the project is bad news for Britain’s energy security, since all bar one of its existing nuclear reactors are due to be closed this decade. Hinkley Point C could generate enough low-carbon electricity to power six million homes.

The potential for further cost overruns is also concerning as the government contemplates a deal to support the construction of a sister station at Sizewell C in Suffolk, for which billpayers and taxpayers would be on the hook for a share of any cost overruns.

When Hinkley Point C received the green light seven years ago, its cost was put at £18 billion, expressed in 2015 money. Repeated setbacks have led the figure to increase to between £25 billion and £26 billion — still in 2015 money and excluding the impact of rampant inflation that has pushed up the prices of everything from labour to raw materials. EDF said February that once the impact of inflation was included, “the estimated nominal cost at completion could reach £32.7 billion”.

Hinkley Point C was financed using a funding model under which consumers pay a fixed price for the electricity the plant eventually generates, irrespective of the construction cost. This fixed price rises automatically in line with inflation, but consumers are insulated from other cost increases.

At Sizewell C, however, the proposed “regulated asset base” funding model will mean that consumers start paying for the plant while it is still under construction and it will expose billpayers to a significant share of any cost overruns alongside investors. In addition, the government is planning to take a 20 per cent stake in the plant, exposing taxpayers to some of the investors’ share of cost overruns.

Alison Downes, of the Stop Sizewell C campaign, said: “The rising risk of further cost and time overruns at Hinkley Point C shows us that EDF’s scheduling for building this type of reactor — despite being involved in four other projects — cannot be trusted. If a regulated asset base-funded, part state-owned Sizewell C went ahead, it would be households and taxpayers who would pay for these huge overspends.”