EDF delays Hinkley Point decision

28 January 2016

Electricite de France (EDF) is seeking additional funding to finance its planned GBP18bn ($25.8bn) nuclear plant at Hinkley Point C in the UK. EDF's board had been due to discuss the issue at its meeting on 27 January to finalise its decision on building two EPR units at Hinkley Point, but the issue was taken off the agenda, according to press reports. A final investment decision could now be announced on 16 February when EDF is scheduled to report its annual results.

The funding of the Hinkley Point project is not completed so a final investment decision cannot be made by the board, Bloomberg reported, citing people with knowledge of the matter who asked not to be identified. EDF's finances are under pressure as a result of falling power prices and a shrinking domestic market share.

EDF last year agreed to finance two-thirds of Hinkley Point, with China General Nuclear Power Corp (CGN) funding the rest. EDF CEO Jean-Bernard Levy told Le Journal du Dimanche on 24 January that the project had reached a level of maturity where a final investment decision would be taken. EDF may sell part of its stake in the project once the construction is "well under way," he said.

Earlier in January EDF union representatives urged the company to delay or cancel the Hinkley Point project in view of the financial situation. The group's finances are constrained by the need to finance the renovation of its ageing fleet of 58 nuclear plants in France, cost overruns on the construction of unit 3 at the Flamanville NPP (also an EPR) and a plan to buy a majority stake in Areva s troubled reactor unit. Areva in turn is facing serious cost overruns on construction of unit 3 at the Olkiluoto NPP in Finland (another EPR).

Investment in new projects will be financed by reallocating proceeds from sales of other assets, EDF said in December. EDF will reduce its French workforce by 5% as part of a plan to cut operational expenditure by €700m ($761m) by 2018 compared with its 2015 cost base.

The planned Hinkley Point C plant - the first new nuclear palnt to be built in the UK in almost 20 years - is scheduled to begin operating in 2025. Together, the two reactors will provide about 7% of the UK's electricity.

Meanwhile, designers are being asked to produce architecture and landscape ideas for NuGen's planned Moorside NPP in West Cumbria through a competition involving the Royal Institute of British Architects (RIBA) and the Landscape Institute (LI).

The competition run by RIBA will be open to all qualified architects and will seek designs for various buildings including a visitor centre for the main site, an accommodation block and masterplan. The competition for landscape architects, run by the LI, will seek the best solutions for providing the setting for the Moorside development. The competition will be open to all chartered landscape architects with a prize fund of GBP20,000 for each competition for the shortlisted practices. The winning architect and landscape architect will be awarded the contract to work with NuGen and will invoice NuGen for their prize money. NuGen plans to build three Westinghouse AP1000 reactors at Moorside, adjacent to the existing Sellafield nuclear site.

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