The French government is asking the UK to help cover the increased construction costs of a nuclear power station to be built in England. The British complaint states that the French state energy company EDF must bear all costs.
EDF announced earlier this week that construction costs at the Hikley Point C twin-reactor nuclear power station under construction in Somerset had risen to €46 billion. In 2016 the cost of the project was estimated at 18 billion euros.
Now the French government wants to find a solution to finance the construction of the proposed Sizewell C nuclear power station at both Hinkley Point and Suffolk.
“This is a Franco-British issue. The British Government cannot say that EDF must find a solution at Hinkley Point and at the same time ask EDF to fund Sizewell. We want to find a global solution to deliver these projects,” he said. stated an official of the French Ministry of Economy.
The dispute is complicated by differences in agreements relating to the construction of nuclear power plants. According to the Hinkley Point C agreement, the majority shareholder of the nuclear power plant is EDF, and the British government does not cover the construction costs, but London is obliged to pay compensation for the electricity produced at the nuclear power plant if the price of market falls below a certain limit.
Under the Sizewell C contract, the UK government is the major shareholder of the nuclear power station and EDF is under no obligation to increase its contribution. This week, the British government announced that it would contribute an additional £800 million to the construction of this nuclear power station, bringing its contribution to £2.5 billion. In total, the nuclear power station is expected to cost £20 billion to build.
Problems with the projects were exacerbated by the decision of a Chinese energy company to withdraw from the Hinkley Point project when the British government decided to exclude the Chinese company from participating in the Sizewell nuclear power station. CGN owns a 33.5% stake in the Hinkley Point C nuclear power station.
CGN has already fulfilled its contractual obligations, but does not intend to cover additional costs due to increased construction costs, as the contract does not oblige the Chinese company to do so.
Both the British government official and the EDF board member agreed in their statements that the EDF will have to cover higher costs than expected.
“The French don’t have much of a chance here, but the CGN problem is very real,” said another person familiar with the talks.
It’s unclear where the extra money will come from. French officials also acknowledge that the British government has difficult budget constraints to consider.
Attracting a private investor would also be difficult, although the possibility of attracting investors with the help of state guarantees is being discussed.
EDF itself has recently gone through a period of financial problems, to resolve which the French government completely renationalised the company. Additionally, EDF has to make investments at home because the French government wants to build several new nuclear reactors.
2024-01-25 10:49:00
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