EDF’s UK Nuclear Project Cost Swells, Pushing Start Further Back

(Bloomberg) -- Electricite de France SA’s flagship Hinkley Point C nuclear plant project will cost more than expected and take longer to complete as the pandemic, supply-chain disruptions and Russia’s invasion of Ukraine boost the cost of materials and weigh on progress.

EDF now expects the two reactors it’s building in southwest England to cost between £25 billion ($31.2 billion) and £26 billion, the French energy giant said in a statement Thursday. That’s up from a previous range of £22 billion to £23 billion. 

It’s the fourth budget increase in five years. The company also pushed back the date when the first reactor will produce power by at least one year to June 2027. Pandemic safety measures resulted in the loss of more than half a million individual days of critical work in 2020 and 2021, said Stuart Crooks, managing director for the project.

“Running the site for longer and less efficiently during the pandemic also adds cost,” Crooks said in a staff memo distributed by EDF. “We are facing the same issues as other major projects with UK-wide supply and labor shortages and inflation.”

The two reactors are supposed to be blazing a trail for a nuclear renaissance in Britain, as the government seeks to boost the country’s energy independence and reduce its reliance on fossil fuels. While rising costs of metals, cement and labor are affecting numerous industries, the revised plan may revive a controversy over how expensive the technology is and whether further holdups are inevitable. 

The reassessment comes as EDF is in talks with the UK government to arrange financing for a second UK nuclear plant that would use the same design. Delays and cost overruns may put off investors at a crucial point in negotiations for the proposed Sizewell C project. Reactors compete for investor capital with renewables, which provide returns much quicker.

EDF has previously increased the Hinkley Point budget in 2017, 2019 and in January 2021, from an initial estimate of £18 billion when the contract was signed with the U.K. in 2016. The debt-laden French utility has a 66.5% stake in Hinkley Point C and China General Nuclear Power Corp. owns the rest. The cost overruns may force the French company to take on a larger part of the project. 

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