EDF has warned that the cost of building two nuclear reactors at Hinkley could be nearly £3bn more than planned, while the start date could be pushed back to 2026.
The project, which was previously expected to cost £18bn, is at the heart of the government's energy policy. Britain is facing a supply crunch as its old, uneconomic coal-fired power plants aren't being replaced quickly enough.
In a statement released ahead of its annual shareholders' meeting today, EDF said the equity commitment on the project includes a contingency margin which could reach £13.8bn for EDF and £6.9bn for its Chinese partner China General Nuclear (CGN).
EDF was thought to be shouldering £12bn of the funding for Hinkley, while CGN would cough up £6bn.
It also expects a 115 month (9.5 year) construction period between the final investment decision until commissioning of the first reactor. It suggests Hinkley won't start generating until the first half of 2026 if the final investment decision is taken in September.
Energy Secretary, Amber Rudd, assured that Hinkley would go ahead in Parliament today, however she later refused to comment on the increased costs.
Rudd also said that the government had received 38 expressions of interest for its £250m funding competition to develop a fleet of small nuclear power plants unveiled in this year’s Budget.
“We’ll be working closely with those companies to make sure we advance the competition in the way that brings on the most likely investment,” she added.
Last week, it emerged EDF’s former chief financial officer had fought for the final investment decision on the nuclear plant to be delayed by at least three years.
“In January 2015, I proposed to negotiate a three-year delay with our client because we reasoned that it would weigh too heavily on EDF’s balance sheet,” Thomas Piquemal told a French parliament committee hearing. “Who would bet 60 to 70 per cent of his equity on a [European pressurised reactor] technology that has not yet proven that it can work and which takes 10 years to build.”