Energy firm EdF is unlikely to decide whether to start building the new Hinkley Point C nuclear power station in Somerset for at least another three months, industry insiders told NCE this week.
EdF had hoped to reach commercial close with its investors at the end of last month (NCE 7 March). But this depended on the firm agreeing a “strike price” - a fixed long term electricity price - with the government.
This did not happen and negotiations continue. EdF is now refusing to give a date by which it hopes to reach commercial close.
“We did not reach commercial close by the end of March as we hoped,” said an EdF spokesman. “We are not speculating as to when it may happen.”
Commercial close is an agreement in principle between EdF and its investors to go ahead with the project.
But industry insiders told NCE it would be at least another three months until any agreement is reached.
“From what I am picking up, it’s not going to be resolved any time soon,” said University of Cambridge researcher and independent nuclear expert Tony Roulstone. “People have mentally adjusted to that fact.”
Consultant EC Harris energy partner Mark Stewart agreed. “I wouldn’t be surprised if it [EdF’s decision] is another quarter away,” he said.
French nuclear analyst Mycle Schneider said he had major concerns about whether Hinkley Point C would ever be constructed. He said too much emphasis was being placed on the strike price negotiations and said they were not the only block to construction.
“In the UK the debate is that once the strike price is agreed then everything is settled,” said Schneider. “That is nonsense. Someone has to come up with the money.”
Schneider highlighted EdF’s E39.2bn (£33bn) debt as of 31 December 2012 and the fact that it has lost about 80% of its stock market value since a high in 2008.
He said this was evidence that the markets do not believe that EdF can deliver new nuclear power stations on time and on budget. “I am surprised the UK government is trusting EdF given the problems in Flamanville,” said Schneider.
However, EdF told NCE last month that experiences gained on Flamanville would help it deliver Hinkley to schedule.
It said this had already happened on the firm’s Taishan project in China, where it is building similar reactors to those planned for Hinkley to schedule.
Roulstone said he believed a deal would be struck and that Hinkley Point C will be constructed.
“The stakes for the UK and French government are too high so they will find a way to accommodate it,” he said.