The company’s board met today (Thursday) to make a final investment decision on the new nuclear plant in Somerset. They voted by a margin of ten votes to seven to press ahead with the plans.
The project is now eight years behind schedule. The chief executive of EDF Energy Vincent de Rivaz infamously said Brits would be cooking their turkeys using power from Hinkley by the Christmas of 2017. It is now not expected to be up and running until 2025 at the earliest.
EDF says 25,000 jobs will be created over the entire construction period. It says the onsite workforce will peak at 5,600.
The plant will feature two European Pressurized Reactors (EPR) with a combined capacity of 3.2GW. It is expected to provide 7 per cent of the UK’s electricity – enough to power 5 million homes.
Responding to confirmation of the project, Tony Ward, head of power and utilities at EY said the decision represented “a major vote of confidence in the UK’s energy market, and in the vital role that new nuclear will play in delivering the UK’s low carbon aspirations.”
Ward added that despite the rise of decentralised energy and renewables as means for decarbonisation, “the robustness and reliability of the system as a whole will still demand large-scale base-load power.
“Today’s announcement is the start of a process to replace some of the existing low carbon nuclear capacity that the UK has already closed, and more that will close in the years to come.”
In conflict with this view however, EDF’s new nuclear project has faced widespread criticism. With an agreed strike price of £92.50/MWh – falling to £89.50/MWh if EDF decides to build another set of reactors at Sizewell C – many have questioned its value for money, particularly when the cost of renewable alternatives is falling fast.
There are also concerns over the EPR, of which there are currently no working examples. Reactors being built at France, Finland and China have been plagued by cost overruns and delays. The owner of the Olkiluoto plant in Finland, TVO, has taken legal action against reactor manufacturer Areva NP because of the problems.
In addition EDF’s ability to finance the project through construction has been called into question. At the end of 2015 the company had net debts of £37.4 billion and, at £18 billion, the cost of building Hinkley is almost equal to the value of the entire company (£19.2 billion). EDF is also set to buy a majority stake in Areva NP at the behest of the French government, which owns 85 per cent of EDF and has a similar stake in Areva as a whole.
Earlier this week EDF shareholders approved plans to sell off €4 billion of new shares in order to help finance Hinkley. The French government said it would buy shares worth €3 billion