EDF is seeking to amend the controversial subsidy contract for its £26 billion Hinkley Point C nuclear plant so that it will not be penalised even if the plant does not start to generate power until 2030.
Hinkley was supposed to start up in 2025 but EDF has pushed this back to mid-2027, primarily blaming Covid disruption, and warned of the risk of a further 15-month delay.
Stuart Crooks, managing director of Hinkley Point C, said at least some of this delay was now “likely” to materialise as the project battles issues including labour shortages.
He revealed that EDF was seeking extra leeway in the already contentious subsidy contract to protect its revenues even if the plant suffers additional delays and does not start up this decade.
The disclosure will raise fresh questions over the schedule for Hinkley, which is supposed to power six million homes.
Further delays would also raise the prospect of additional increases in costs, which have risen from £18 billion when it got the go-ahead in 2016 to as much as £26 billion at 2015 prices.
EDF and its partner, China’s CGN, are responsible for cost overruns at Hinkley but the government is considering investing in a sister project at Sizewell C in Suffolk where taxpayers could be on the hook.
At Hinkley, EDF has a contract with the government that locks consumers into paying a fixed, inflation-linked price for the electricity Hinkley will generate for 35 years. The deal gives four years’ leeway, until 2029, before delays start eating into the duration of the contract, and eight years before the contract can be cancelled.
EDF has applied to the Low Carbon Contracts Company (LCCC), the government body in charge, to seek at least a year’s extra leeway, claiming “force majeure” because of Covid.
“We’ve claimed a move to that backstop date so it gives us more time,” Crooks said. “We believe that Covid has added a year to our schedule, but we need to agree that with LCCC, otherwise we’re a year closer to losing revenue, if we delay the project.”
