Cost Overruns Imperil UK’s Net-Zero Goals

Nuclear Delays, Cost Overruns Imperil UK’s Net-Zero Goals

Électricité de France (EDF), the owner of the biggest construction project in the world—the giant nuclear power plant under construction at Hinkley Point in the southwest of Britain—recently announced further cost increases and delays to its completion, adding to doubts that the United Kingdom can fulfill its legal pledges to reach net-zero carbon emissions by 2050.

The French government, which owns EDF, wants the UK to chip in billions of pounds to help bail the project out, but London says it has no obligation to do so. This is leading to tensions between the two governments, with French taxpayers objecting to paying for British nuclear power stations when their own nuclear industry is struggling with under-investment and a massive debt burden. It leads to doubts that a second power station of the same size, this time on the Suffolk coast in the east of England, will ever be built.

The overoptimistic miscalculations made by EDF mean the cost estimates for the Hinkley Point project have now doubled from the 2015 estimate of £18 billion (US$22.8 billion) to between £31 and £34 billion. But that makes the problem sound better than it is: the figures are calculated in 2015 prices, and the true cost with inflation is now said to be £46 billion (US$58 billion) and still rising.

EDF is faced with making up this funding gap when it is already deep in debt and needs vast capital reserves to modernize its own fleet of more than 50 reactors and start a promised new build program. Just before the French government re-nationalized the company last year, its debts were already a staggering €54.5 billion (US$59 billion)/

When the Hinkley Point power station was first planned, the company famously predicted that UK consumers would be cooking their Christmas turkeys on power from the station by 2017. That date has been revised several times, and stood at 2027 until the third week in January. Now it has slipped back in the best case to 2029, but more likely to 2031. As one commentator put it: “The turkeys would have died of natural causes by then.”

The problem is that both governments are relying on their nuclear industries for a large part of their emission reductions. Both have to reach net-zero targets by 2050. Hinkley Point would in theory be producing 7% of British electricity by 2030 as an interim target date, displacing existing gas stations. But Hinkley Point was only part of the net-zero plan—EDF is in partnership with the British government to build a second  identical power plant at Sizewell, on the Suffolk coast.

Both Hinkley Point C and Sizewell C are twin European Pressurised Reactors (EPRs), designed by EDF. Each station is supposed to produce enough power to supply six million British homes. But it is a design that has proved difficult to construct. EDF started one in Flamanville in Normandy in 2009 which was expected to be running in 2013, but is still not complete. Yet the UK is intent on continuing to allow EDF to build four reactors of the same design in Britain.

The British government has so far sunk £2.5 billion into the Sizewell C project but is not making a final investment decision while it looks for private investors. Up to now, it has found no takers.

So while the future of this power station remains in doubt, the timetables are slipping badly, and even if it does go ahead not many would bet on it producing power before 2050.

One of the odd aspects of this situation is that, in an election year in Britain, there is no political debate about what looks like a serious crisis for the nuclear industry and the UK’s climate targets. The Labour party supports the building of nuclear power stations, too, and will not be drawn into debate for fear of antagonizing the trade unions in the sector that are strongly in favour of giant power stations.

Suffolk campaigners, however, are not so reticent. “Hinkley Point C and Sizewell C epitomise the definition of insanity—doing the same thing over and over and expecting a different result,” said Alison Downes of Stop Sizewell C. “EDF and its EPR reactors are an unmitigated disaster, and it stretches credulity that Sizewell C is affordable. Indeed the government seems too embarrassed to publish the cost of Sizewell C. It should cancel the project immediately instead of handing over scarce billions that could be used instead for renewables, energy efficiency, or—in this election year—schools and hospitals.”

Stop Sizewell C and a number of other groups are challenging the Conservative government in the courts over its failure to fulfill its legal obligations under its own law that bound the UK to reach net-zero by 2050. Further delays to the nuclear power station construction program may add to the campaigner’s case.

Last month, the UK government produced a new nuclear roadmap projecting a massive new build program to bolster the industry, both for these large reactors and dozens of small modular reactors. The Department for Energy Security & Net Zero (DESNZ) remains optimistic about the nuclear industry despite the delays, but said it would not be bailing out EDF.

Hinkley Point C “is not a government project,” the department said in a statement, so “any additional costs or schedule overruns are the responsibility of EDF and its partners and will in no way fall on (UK) taxpayers”.

For the first time, the department’s nuclear road map was honest about why Britain and France are still so keen on nuclear, as opposed to much cheaper renewables. The roadmap mentions 14 times the link between civil and military nuclear power and the need to strengthen ties between the two to reduce costs. This military link was consistently denied in the 1990s, and in the earlier years of this century.

While Labour, which has a massive lead in the opinion polls going into election year, refuses to engage in a nuclear debate, it does differ from the Conservatives on the role of renewables. The current government encourages offshore wind and some solar power but has effectively blocked onshore wind farms for nearly a decade. Since this is the cheapest form of electricity production in these windy islands, and the public overwhelmingly support onshore turbines, Labour says it will at least overturn this blocking policy.

Source: The Energy Mix