Hinkley Point Nuclear Power Plant
I have written previous blogs in March 2016 on the nuclear power plant at Hinkley Point. My interest then was to show how different stakeholders had to agree to achieve the financing for a major £18bn project.
Now the project is in the news again – twice!
Hinkley Point Current Status
20th September 2019:
The power plant project is now in Year 3 of a 10 year schedule – and should be producing electricity in 2025. The budget is now quoted as £20bn.
This update video shows progress on the project, and hints at future problems.
New Budget Problems?
25th September 2019:
News today reports that the project is over budget and quotes the latest forecast to be between £21.5 and 22.5 bn.
The risk of being late has also increased, based on difficult ground conditions. Lessons learnt from a similar reactor in France that is 10 years behind schedule suggest that delays are inevitable.
The original blog post was all about the financing of major projects. In the case of Hinkley Point a guaranteed price of electricity has been promised to EDF as operators. However this price is well above the current market rate for electricity, especially from wind farms. The model for financing future projects may have to change as a result, and the cost may fall directly onto consumers.
Nuclear power provides a carbon free solution to electricity generation. Nuclear power generates electricity even when the sun isn’t shining and the wind isn’t blowing. It makes sense to have a diverse source of power generation options.
Major projects are expensive, and need complex financing arrangements that depend on future predictions of demands. Predicting the future is not easy!