France wants the UK government to contribute more funding to the Hinkley Point NPP and Sizewell C NPP being built by EDF, Reuters reported, citing “three people familiar with the matter”. The 3,200 MWe Hinkley Point C (HPC) in Somerset was originally scheduled for completion in 2017, but is facing delays and cost overruns. EDF recently deferred the start date of the plant to at least 2029 from a previous mid-2027 target. It also revised the cost to £31-34bn ($39-43bn) based on 2015 values, up from an earlier estimate of £25-26bn. EDF also plans to build a similar plant at Sizewell C in Suffolk, but it has yet to receive a final investment decision.
According to Reuters’ sources, during discussions between the two governments, France has been pressing for a financial injection for both projects. One of the sources said the French government holds the UK government responsible for China General Nuclear’s (CGN’s) pulling out of the project when its 33.5% stake in the project was taken over by the UK. "Paris thinks that the British government is responsible for CGN's withdrawal and that it would therefore not be illogical for it to inject cash in HPC," the source reportedly said. A second source said the lack of CGN funding for HPC had put excessive pressure on EDF.
Reuters quoted a spokesperson at the UK Department for Energy Security & Net Zero as saying HPC was not a government project. "Any additional costs or schedule overruns are the responsibility of EDF and its partners and will in no way fall on taxpayers," the spokesperson said. A third source said cross-Channel discussions on the matter “were on hold and a cooling off period was needed before talks could resume”.
This same source noted that in 2023, the UK government began looking for private investment in Sizewell C but had said little since and that the viability of the project could be at risk.
The UK Guardian cited two former EDF executives as saying the odds were stacked against Hinkley from the start. “I would have bet at the time that we would see the costs we have today. And I think they’ll climb higher too,” one of the sources noted. According to The Guardian, Philippe Huet, a former head of EDF’s internal auditing in Paris, said the deal “was based on political strategy rather than a commercial rationale”.
He reportedly added: “At the time that it was agreed it was already known that EDF’s estimates understated the cost and schedule of the project. Key decision-makers chose to ignore this because it was too important strategically. As they would say, if a project cannot be profitable it must at least be strategic.”
According to Huet, EDF may even try to renegotiate its contract with the government, The Guardian noted. “He estimates it could seek to raise how much it charges per megawatt hour of electricity produced by about 15% to make Hinkley a worthwhile venture.”
He further added: “I believe that Hinkley Point C is now a loss-making project for EDF. Its costs have climbed, of course, but also the assumptions for the plant’s running rate were too optimistic from the start. Writing EDF a blank cheque will not help. And the UK government should be concerned about plans for new EPRs [reactors] at Sizewell. What assurances are there that the project will deliver on current promises?”
The Guardia also cited an unnamed “nuclear industry source” as suggesting that increased costs may be worthwhile. “There are many conflicting views on whether Hinkley is a good deal but it often depends on the timeframe you’re using,” this source said suggesting that the picture may change once the NPP is operating.
“There will be opportunities for EDF to refinance the project when infrastructure investors decide they are interested in taking a stake in a stable, long-term investment,” the source said. “It’s also important to remember that this piece of infrastructure will last at least 60 years, perhaps even as long as 80 years. Once the costs of construction have been covered it becomes a potentially very lucrative asset.”
Commenting on the issue, the Financial Times quoted Sir John Armitt, Chair of the National Infrastructure Commission, as saying: “The UK needs nuclear as part of its power generation mix as we move to a system based largely on renewable sources. Hinkley Point C should still be able to make a contribution to the government’s target to decarbonise the power grid by 2035, but the chance for any additional major plant doing so is at risk unless we can learn from Hinkley in order to build future plants more quickly and efficiently.”
