Waiting for the fog to lift over Hinkley Point

29 July 2015 James Varley



James Varley reports on the NIA's Nuclear New Build conference in London and the recent developments at the Hinkley Point C, Wylfa Newydd and Moorside projects.


It is now about two years since loan guarantee arrangements were agreed between EDF and the UK government for the planned Hinkley Point C (2 x 1670MW EPR) nuclear power project and around 18 months since initial agreement was reached on what some would see as reasonably generous "investment contract" for the plant, which includes a 35-year "contract-for-difference" with a strike price (essentially guaranteed income) of 9.25p/kWh (or 8.95p/kWh if the follow on twin-reactor plant, Sizewell C, also gets built).

But still no final investment decision has been made by EDF, and significant uncertainties remain, not least those created by financial troubles at EPR-supplier AREVA (which at one time was to have been a 10% shareholder in the project), legal challenges (by the government of Austria among others) to the European Commission's approval of the state aid case for the project, the need to reach agreement with Chinese investors, and severe delays and cost overruns at existing EPR projects in Europe, Olkiluoto 3 and Flamanville.

The need to achieve clarity on Hinkley Point C was a recurring theme at the NIA's Nuclear New Build 2015 conference, held in London, 30 June - 1 July. We are "waiting for the fog to lift over Hinkley Point C so we can see the way forward," said Tom Samson, CEO of NuGen, recently arrived from Abu Dhabi where he was COO of Emirates Nuclear Energy Corporation (ENEC), which is constructing Korean PWRs at Barakah.

NuGen, a joint venture of Toshiba and ENGIE (formerly GDF Suez), is planning to build the 3.4GW Moorside plant, consisting of three Westinghouse AP1000 PWRs, on land adjacent to Sellafield in what Tom Samson described as the UK's "nuclear heartland", a particularly attractive feature of this location for a nuclear plant developer.

The Moorside project has recently taken a significant step forward with the signing of a land contract for the site with the UK Nuclear Decommissioning Authority, following a successful bid for an option on the land back in 2009. The signing marks the completion of studies confirming that the site is suitable for the three planned reactors, the first of which is targeted to come on line in 2024, and, interestingly, looks like being about the 17th unit in the AP1000 pipeline - certainly qualifying it as proven technology.

Noting that ENEC went from about 400 staff to 1700 during his three-and-a-half years in Abu Dhabi, Tom Samson told the NNB2015 audience that "you are going to see NuGen grow" as the company finalises the EPC structure for Moorside and "engages with government", which he expects will want to proceed "faster and cheaper." He also emphasised that more clarity would be needed to "build a path forward to attract equity."

A final investment decision for Moorside is anticipated in 2018. This seems to be a little ahead of the FID date of early 2019 being talked about by nuclear developer Horizon (purchased from E.ON/RWE in 2012 by BWR-supplier Hitachi), which is planning twin-ABWR stations (2 x 1380MW) at Wylfa Newydd and subsequently Oldbury B.

"These projects are important to the fabric of society...and we have to get it right."

Speaking at NNB15, Alan Raymant of Horizon recalled that at a previous NIA New Build conference he had said that Horizon had expected to start construction in 2013. "Does that mean we've failed? No, not at all." These projects are "important to the fabric of society...and we have to get it right." Nuclear power currently accounts for about 20% of the UK's electricity (predominantly from ageing AGRs), and "we have to replace that."

Horizon is also talking about growth, with the number of employees projected to rise from a little over 300 today to about 550 in 2019, while the forward priorities include completion of the UK ABWR Generic Design Assessment in 2017. One matter to be resolved is the definition of the source term for the ABWR (ie, the inventory of radionuclides in the plant to be assumed in safety and environmental assessments), but Horizon believes this to be more about how the safety case is made rather than a substantive safety issue per se.

Developing nuclear new build projects is of course not for the fainthearted or short-term thinkers - as several speakers at NNB15 noted it is certainly more of a marathon than a sprint - and requires very deep pockets. Horizon has for example already spent about £80 million on its supply chain and last year conducted a programme of ground investigation at Wylfa that was the "largest in Europe", according to Alan Raymant.

But the mood among the 300 or so delegates at NNB15 seemed to be broadly positive, greatly encouraged by the apparently unequivocal support being given to nuclear power by the new government, which talked of "significant expansion" in its election manifesto.

Speaking at NNB15, new Energy Minister Andrea Leadsom reaffirmed this support: "There should be no doubt that this government is absolutely committed to nuclear power. We see new nuclear power stations as a vital part of the infrastructure investment needed in our electricity sector to ensure our future energy supply."


About the author

James Varley is group managing editor, Nuclear Engineering International

 

Tom Samson, CEO of NuGen speaking at Nuclear New Build 2015
NuGen CEO Tom Samson and NDA CEO John Clarke sign the Moorside land contract in July
Andrea Leadsom MP speaking at NNB15


Privacy Policy
We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.