EDF has signposted a significant increase in the cost of the Hinkley Point C nuclear power project, ahead of its annual shareholder meeting.
In a statement the company said the contingency needs of its project to build two nuclear reactors in Britain could increase the cost by about £3bn to £21bn.
This would include a contingency margin which could reach £13.8bn for EDF and £6.9bn for its Chinese partner CGN.
EDF also said on Thursday that it would commit to provide “limited” financial guarantees to CGN, particularly in the case of cost overruns related to delays to the project schedule, or in the event of a challenge to the CfD by European authorities. It did not specify the size of these guarantees.
The French utility also said it expects a 9.5 year construction period between a final investment decision until commissioning of the first reactor.
The final investment decision has been delayed several times. Last month, the French government – which owns 85 percent of EDF stock – said it expected a decision by September.
NOTE: EDF issued a clarification to the earlier statements on Thursday evening.
The statement read, “The cost of the project is £18bn in nominal terms. We have stated this in public many times and this has not changed. This £18bn includes and has always included a provision for risks and contingencies. If we deliver the project for less, the gain will be shared with customers as part of the CFD gain share mechanism. Customers would not bear the cost of any overruns.The total equity the two shareholders are committed to provide if necessary includes 15% of additional capacity amounting to £2.7bn.
This does not mean that we anticipate any additional costs beyond £18 bn. It simply reflects normal, prudent good practice for any construction project to know that the money would be available in the case of more extreme scenarios. We don’t expect to use the additional 15% because we expect that Hinkley Point C will be on time and on budget at £18bn.”
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