YET more cost overruns at the Hinkley Point C reactor, a project led by EDF Energy (EDF) of France with the backing of China General Nuclear (CGN), are raising questions about the viability of future nuclear power plants in the UK.
EDF recently announced that Hinkley Point C is now projected to cost up to 22.5 billion pounds sterling – a 2.9 billion pounds sterling increase on its previous estimate. And there could be a one-year delay, with commercial operation pushed back to 2025.
The guaranteed price for electricity generated by Hinkley Point C was originally agreed in October 2013, and is set at 92.50 pounds sterling per MWh for its first 35 years of operation. Thus, the cost overruns can be met by EDF and CGN and still make a return on the project.
However, such a high guaranteed pricing model is unlikely to apply to future UK nuclear projects, which could make them less commercially viable.
China viewed its entry into Hinkley Point C as the beginning of a longer-term plan to play an important role in UK nuclear power generation. EDF and CGN have plans to build another reactor, Sizewell C in Suffolk, which will be similar to Hinkley Point.
Another project involving CGN and EDF is planned for Bradwell B in southeast England, this time with CGN taking the lead and using CGN technology. During the development phase of Bradwell B, CGN will take a 66.5% share and EDF will take a 33.5% share.
It is proposed that Bradwell B will be developed with a third-generation pressurized water reactor designed by CGN called the UK HPR1000. Last November the joint UK regulators announced the commencement of Step 3 of the Generic Design Assessment (GDA) for the UK HPR1000 nuclear technology.
Under an agreement signed in October 2015, CGN took a 33.5% stake in EDF's Hinkley Point C project, which is located in Somerset, southwest England.
The project comprises two Areva-designed European Pressurized Reactors (EPRs), and is the first new nuclear power station to be built in the UK in 20 years. It will provide about 7% of the country's electricity.
The final agreements enabling construction of two EPRs at Hinkley Point C to proceed were signed in September 2016 by the government, EDF and CGN. EDF said in the summer that the project had successfully delivered J-0 (Jalon Zero, a French term meaning milestone zero). This was the final pour of concrete to construct the nuclear island on which the reactors will sit.
EDF has experienced delays and cost overruns elsewhere with the same technology as Hinkley Point C. Last week EDF announced yet more delays, and an additional 1.5 billion euros in cost overruns, at its Flamanville project in Normandy, France. It will now cost 12.4 billion euros and come online in late 2022. EDF is also behind schedule with its Olkiluoto 3 reactor in Finland.
The two reactors at Hinkley C will be the fifth and sixth built by EDF under its EPR design. The first two are located at the Taishan facility, in Guangdong Province around 140 kilometres west of Hong Kong.
Taishan unit 1 entered commercial operation in December 2018, and unit 2 entered commercial operation last month. EDF is a minority shareholder in the Taishan nuclear power plant, which is a joint venture with CGN and regional Chinese utility Yuedian.
French President Emmanuel Macron has instructed EDF continue with feasibility studies for more EPR reactors in France, but has said he will wait until 2021 before making a final decision on whether to proceed with new projects.
The pressure will be on the UK government to pay lower tariffs for the next wave of planned nuclear reactors. However, at the same time, ambitious targets to reduce CO2 emissions are helped by having nuclear power in the mix, which is also necessary for baseload at times when there is minimal renewable generation but high demand - as on a cold winter day with no wind.
CGN is still pressing ahead with its UK plans, and alongside the projects with EDF it is also keen to gets its own reactor technology up and running in a major European market.