EDF Energy to press on with Hinkley nuclear reactor project

http://www.theguardian.com/business/2014/dec/04/edf-energy-nuclear-reactor-hinkley

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EDF Energy expects to give the go ahead before spring for construction of the UK’s first new nuclear reactor for 20 years, despite financial problems at its partner Areva and a warning on the difficulty of such projects.

The comments from Vincent de Rivaz, EDF chief executive, came at a nuclear conference where senior industry figures raised fears of a skills and supply chain crunch at the £25bn Hinkley Point C power station in Somerset.

De Rivaz admitted that delays at its Flamanville plant in France were a setback, but insisted they would not impact financially on the British project, which is using the same European pressurised reactor (EPR) technology.

“We should be under no illusion that building new nuclear plants has never been easy,” he told the Nuclear Industries Association (NIA). “We take the construction risk for Hinkley Point C – not the customers. Let us be clear, the cost of Hinkley Point C has not increased by one penny as a result of the delays at Flamanville.”

The EDF executive said volatile oil prices, uncertainty over Russian energy supplies and high hopes for a binding new climate change agreement to restrict carbon emissions underlined the need for new nuclear plants.

De Rivaz said legal and other work needed to be completed before EDF could give the final investment decision on Hinkley Point, but he remained confident that a positive decision could be made in the first quarter of 2015. He said discussions with potential new and existing foreign shareholders to the project were continuing.

Asked about the problems at Areva, designer of the EPR and shareholder in the Hinkley project, De Rivaz said the French government, which owned the majority of shares in the business, had agreed to support it as a going concern.

But the conference also heard from John Hutton, chairman of the NIA, who warned of a “capacity crunch” because the British supply chain would struggle to cope with an upsurge in work from other new build projects as well as existing contracts top keep reactors running or for decommissioning old ones.

Andrew Storer, a Rolls-Royce executive, said he was concerned at the lack of facilities for testing nuclear equipment, while Mike Tynan, chief executive of the Nuclear Advanced Manufacturing Centre, said smaller UK companies in particular could struggle to meet the high standards required for a nuclear safety culture as well as product quality and skills.

Meanwhile, the NIA released the results of a YouGov survey of 2,000 people which showed that 45% were in favour of new reactors and 20% opposed. Ten years ago only 35% supported more construction.