In a statement, the firm said an internal review had concluded that the additional costs “result mainly from a better understanding of the design adapted to the requirements of the British regulators, the volume and sequencing of work on site and the gradual implementation of supplier contracts”.
EDF also noted that the risk of delay in completing the project is now estimated at 15 months for the first reactor and nine months for the second, with a potential associated cost of £0.7bn.
However, it said management is still aiming to deliver unit 1 in late 2025 as planned, and that it would continue to focus on ways to reduce costs and risks.
EDF’s update comes on the heels of a recent report on the Hinkley project from the National Audit Office (NAO), which said the government had “locked consumers into a risky and expensive project with uncertain strategic and economic benefits” and that the economic case for the project was “marginal”.
“We cannot say the [Department for Business, Energy and Industrial Strategy] has maximized the chances that it will achieve value for money,” the NAO added, recommending that the government “maintain and update a ‘Plan B’ for achieving its objectives in the event that Hinkley Point C is delayed or cancelled”.
The report also said further costs could be incurred if the UK withdraws from the Euratom nuclear treaty when it leaves the EU. According to the NAO, the UK could have to pay compensation to EDF or raise the guaranteed power price it has already negotiated, which at £92.50/MWh is higher than the current market price.
The government hopes to eventually supply around 7 per cent of the UK’s demand with power from Hinkley.
Meanwhile Dr Jenifer Baxter, Head of Energy and the Environment at the Institution of Mechanical Engineers, said in response to EDF’s announcement, “Today’s news that the Hinkley Point C project will cost more and maybe take longer means that it’s possible that some existing power stations will require further life extensions. It is not an option to “turn the lights off” and that means that any gaps will need to be covered by gas and other technologies to secure supply and meet changing demands.”