EDF could be bypassed for Hinkley Point project under Chinese government’s ‘plan B’; EDF adds GBP 2.7bn contingency provision to Hinkley budget
The Chinese government is working on a confidential proposal to bypass the French energy group Electricite de France [EPA:EDF] for the construction of the Hinkley Point nuclear power plant in the UK, The Times reported.
The government is working on an alternative proposal to build two nuclear plants without EDF’s participation in the event that the current GBP 21bn (EUR 26.65bn) deal collapses, the item said.
The report cited former UK energy minister David Howell, who said in the UK parliament’s upper chamber the House of Lords that China also has an alternative plan to build a couple of smaller nuclear plants without the involvement of EDF, and more quickly than the plans proposed at the moment.
As previously reported, EDF and the Chinese engineering group China General Nuclear Power Corporation (CGN) have proposed a GBP 18bn construction plan for Hinkley Point.
EDF has delayed making a final investment decision regarding Hinkley Point several times and recently indicated that the decision would be made in September, the article noted.
Howell later told the newspaper that his assertion was based on his deduction of the views of informed experts. Howell has also held private meetings with delegations from China, he item said.
Howell is president of the British Institute of Energy Economics and chairs Windsor Energy Group, the item noted.
The government at first informed Howell that it was aware of the Chinese proposal but later indicated that their representative in the House of Lords had heard incorrectly, the report added. The newspaper went on to quote a spokesperson for the UK Department of Energy who said there are no plans for “the Chinese” to construct a nuclear reactor at Hinkley Point.
EDF owns the Hinkley Point site and therefore any project would require the French group’s approval, the article said. If EDF was unable to make a final decision on investment in Hinkley Point, it could theoretically be compelled to allow another developer to take over the project on the site, according to the report.
Separately, EDF on Thursday issued a statement to the effect that contingency provisions could add GBP 2.7bn to the existing forecast GBP 18bn cost of the Hinkley Point project. EDF added that it does not expect to incur costs of more than GBP 18bn and that the additional 15% provision by itself and CGN is merely normal practice for construction projects.
The Times