More doubts over Hinkley C have been raised this week after the nuclear power manufacturer Areva that has a stake in the prospective plant issued a profit warning. Why this story which has almost passed by almost unnoticed this week is raising alarm bells is that Areva’s problems are caused by the construction problems they have had building the reactor in Olkiluoto Finland as well as the two reactors they are building in France which are running over cost and behind time.
Its difficult to find unbiased reports on the Olkiluoto project but the project was signed in 2003, construction started in 2005. Very like the UK and Hinkley C there was supposedly no state aid although the loans were very cheap and subsidised. A consortium of private Finnish companies (TVO) ordered the reactor. From then on everything that can go wrong has done. Part of the problem for Areva was it promised in its contract to build it for a fixed cost, after huge cost overruns its tried to get out of this and both TVO and Areva have sued one another. Even Areva’s website shows the delays (according to it the reactor should have been operational in 2012!).
The latest is that operation is expected to start in 2018 and the reactor costs have soared by at least 3 fold. One hidden cost for TVO is they will need to buy power in the meanwhile from somewhere else. This has to raise more doubts over Hinkley C, since Areva’s three projects have gone pear shaped. The warning signs have been evident in the UK. I saw Vincent de Rivaz– CEO of EDF Energy say on Channel 4 news in 2005, they wanted no subsidy. Then a few months later on the same show he said that they wanted £1Billion, I believe to clear the ground at the site (seemed a lot to me). After much delay we understand they want a guaranteed price of 9.5p + RPI for 35 years and now finally we understand that the cost of the project may have risen by £10Billion. Its hard not to see the government being asked to bail this out at some point down the line.
In the interest of balance our view that nuclear is not the answer to climate change or peak oil has not gone unchallenged (see our books Amazon page) and our responses here. The whole business of Hinkley C is especially puzzling when the UK energy secretary says that solar will be the cheapest energy source. Its up to those who disagree with the above to explain themselves.