Friday, 22 July 2016

EDF to postpone Hinkley Construction start to at least mid 2019

The media is full of stories that EDF is about to announce a 'final investment decision' on Hinkley C nuclear power station, whereas the logic of its own press statements suggest that the project is in fact in deep freeze. Once again, EDF's superb public relations is convincing people that its disastrous Hinkley C power plant project is moving ahead, whilst the reality is that it is announcing that the project will not be started until at least 2019. And even this date seems to be associated with the commissioning of the terribly delayed sister project at Flamanville.

I have lost count of the number of times that EDF has sparked speculation that it is about to announce a final investment decision for the project. These 'announcements', given through press briefings about which EDF bristles with annoyance if people question their connection with reality, have occurred several times since 2012.

And yet EDF's own press release in effect says the opposite of the 'final investment decision' press stories that EDF have inspired.The document, released by EDF on July 21st, actually says: 'The first concrete of reactor 1 of HPC, scheduled for mid-2019, would coincide with perfect continuity with the start-up of the EPR at Flamanville, scheduled for the end of 2018'

So, what is actually happening is that, as experts familiar with the saga know only too well, EDF is confirming that Hinkley's construction could not possibly begin until the safety issues surrounding the reactor design have been cleared and the working of the Flamanville project has been demonstrated. This is not going to happen for a minimum of THREE YEARS.
Of course even this possibility defies commercial logic given that the project would bankrupt EDF without massive subsidy from the French state.The UK has agreed in principle to pay EDF (in June 2016 money) 97 per MWh for 35 years of operation for the project, but even this price would not go close to covering the risk that EDF would take with the project. Hence the need for a massive state handout. The French unions and many financiers and managers inside and outside the company regard the whole thing as a politically motivated piece of industrial suicide.

Even the UK Treasury has long since sidled away from the project, effectively cancelling its offer for guaranteeing the bulk of the loans that EDF would hope to take out for the project. Indeed, contrary to what seems to be widely assumed, the UK Government has not even offered EDF a legally binding contract. It beggars belief how seriously one can take a project that has not even got an offer of a contract from the people who are supposed to be paying for it!
But then the project has long since departed from being based on any sense of commercial reality, and linkages with commercial reality have always been tenuous, as they will be with any nuclear power project that has to meet the sort of safety standards demanded in developed countries these days.

Whatever 'decision' will be reached at next week's EDF Board meeting, it will, as EDF clearly state, not lead to the construction of the Hinkley project being started. But it will be just a continuation of the public relations pantomime that we have been witnessing for several years now.

See EDF's press release at:
http://media.edfenergy.com/r/1127/hinkley_point_c__the_board_of_edf_called_to_consider_a

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