EDF Sees Increased Risk of Delay to New UK Atomic Reactors

(Bloomberg) -- Electricite de France SA said the risk of further delay to two nuclear reactors in southwest England has risen because of construction setbacks.

EDF flagged last year that the plants may start 15 months late. The reactors at Hinkley Point have been touted by the UK government as sparking a nuclear renaissance, boosting energy independence and reducing reliance on fossil fuels. But the work has been plagued by multiple holdups and cost overruns.

The increased risk of a 15-month delay is due to “performances on civil works and challenges on mechanical, electrical, heating, ventilation and air conditioning,” EDF said Thursday in an earnings presentation. “Progress is below the planned trajectory and action plans have been set.”

The reactors, costing as much as £32 billion ($41.5 billion), are due to start operating in 2027 and 2028. The ballooning budget has fueled controversy over the vast sums needed for new nuclear developments, even as other low-carbon technologies such as offshore wind have also faced inflationary pressures.

Hinkley Point’s setbacks come as EDF seeks to arrange financing for a second pair of atomic plants — at Sizewell in eastern England — that would use the same design. Delays and cost overruns may deter investors who also face increasing demands for capital from renewables, which provide swifter returns.

The debt-laden French utility has a 66.5% stake in Hinkley Point, while China General Nuclear Power Corp. owns the rest. As funding requirements now exceed contractual commitments, shareholders will be asked to provide additional equity voluntarily starting in the fourth quarter.

“The probability that CGN will not fund the project beyond its committed equity cap is high,” EDF said Thursday. “Financing solutions are being investigated, in the event that CGN does not allocate its voluntary equity.”

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