Nuclear Power Gap Looms in the UK: Hinkley Point C Nuclear Power Plant Will be Completed Later And Will be Even More Expensive
Paris - The British nuclear power plant Hinkley Point C currently being built by the French state-owned company Électricité de France (EDF) will be even more expensive and completed much later than planned. The delay means that the UK is facing a nuclear power shortfall at the end of the decade unless old nuclear power plants remain on the grid for longer than previously planned.
British nuclear power plant Hinkley Point C costs more and more and will come later
The French energy group EDF yesterday (23 January 2024) announced new cost and construction time estimates for the completion of the British nuclear power plant Hinkley Point C with a gross capacity of 3,280 MW (2 units C1 and C2 of 1,640 MW each). The last update dates from 19 May 2022, according to which the first nuclear power plant unit C1 was to start producing electricity in the UK in June 2027, followed by unit 2 in June 2028. This will now come to nothing.
In a new review of the Hinkley Point C project, EDF has now come to the conclusion as part of a reassessment that EDF's goal is to "commission the C1 nuclear power plant unit towards the end of the decade". The first EDF scenario envisages the commissioning of C1 in 2029, while the second scenario (baseline scenario) envisages 2030. In the least favourable scenario, however, unit 1 may not go into operation until 2031, with unit 2 following thereafter.
Meanwhile, the costs for the completion of Hinkley Point C continue to explode, with EDF currently estimating £31 to £34 billion, albeit in 2015 values (without interim interest and at a reference exchange rate of £1 = €1.23). At the time of the British decision to start construction in 2016, the costs were still estimated at £18 billion.
State-guaranteed purchase price for nuclear power from Hinkley Point C is rising inexorably for the British people
While the construction costs will be borne by the French state-owned company, British electricity customers and taxpayers will have to purchase the nuclear power at a price guaranteed by the British government. This is based on the agreement between EDF and the British government under a Contract for Difference (CfD) model. This guarantees EDF a price for nuclear power that starts at £89.50/MWh (10.3 cents/kWh) and rises in line with the annual inflation rate. According to the extract from the British CfD register as of 1 September 2023, the current price for nuclear power has risen to a new interim high of £128.09 /MWh (approx. 14.8 cents/kWh).
Assuming a conservative British inflation rate of just 3 per cent per year, the IWR calculation shows that the purchase price for nuclear power from Hinkley Point C will already be 18.20 cents per kilowatt hour of nuclear power in 2030. If the traded market price for the electricity is below this "strike price" in 2030, the British taxpayer or electricity customer will have to pay the difference. For comparison: on the futures markets, for example, the electricity price (baseload) for the German market area for annual delivery in 2030 is currently (January 2024) traded at only around 6.1 cents for a kilowatt hour of electricity.
UK faces nuclear power shortfall due to construction delays at Hinkley Point C
Only nine nuclear power plant units at four sites with a gross capacity of 6,500 MW are currently still in operation in the UK. At its peak, the UK had nuclear power stations with a capacity of 13,000 MW (mid-1990s) in operation, but the quiet and gradual shutdown process of the UK's ageing nuclear fleet is causing a steady decline in nuclear power station capacity.
The original plan was to shut down the eight remaining old British AGR nuclear power plants by 2028, with the new Hinkley Point C nuclear power plant providing a replacement from this date at the latest. This schedule can no longer be adhered to if Hinkley Point C is not completed until the end of the decade. If EDF were to actually take all eight old AGR nuclear power plants in the UK off the grid by 2028, the British nuclear fleet would be reduced to just one nuclear power plant. Only the Sizewell B nuclear power plant with a gross output of 1,250 MW would still be producing nuclear power in the UK after 2028 and until Hinkley Point C is completed.
In order to close the looming nuclear power gap, EDF is therefore looking into extending the operating times of old AGR nuclear power plants that are still in operation. The sticking point, however, is the advanced ageing effects (cracks) in the graphite moderator of the AGR nuclear power plants. Whether it is technically possible to extend the operating life of a nuclear power plant depends on the existing signs of ageing and on compliance with safety-related requirements in addition to the upgrade costs.
Source: IWR Online, 25 Jan 2024
