French Plans for a Nuclear Plant Begin to Look Like a Bad Deal for Britain
Tue May 03, 2016 11:13:am World
3K By sosa hills
As Britain races to replace its aging nuclear reactors and coal generators, it's hoping to team up with France to build the most expensive power plant in history, a massive atomic facility with two reactors at Hinkley Point on England's southwestern coast.
It could provide 7 per cent of the country's electricity by 2025. But the design, intended to showcase the latest French reactor technology, poses engineering and financial problems that could create a costly morass for both countries.
State utility Électricité de France (EDF) is expected to build the plant and finance two thirds of the estimated £18 billion ($26.2 billion) cost.
That price tag assumes the Evolutionary Power Reactor (EPR), the next generation model planned for Hinkley Point, will be delivered on time and on budget. But that hasn't been the case in France and Finland, where EPRs under construction have run into multiyear delays and billions in cost overruns.
Plans for Hinkley Point are creating turmoil within EDF, which also needs to spend €50 billion ($56.5 billion) to renovate its network of French nuclear reactors by 2025.
In March, EDF's chief financial officer quit rather than continue with the U.K. project.
Ratings agencies have warned of a possible credit downgrade, and employee unions are threatening to strike. Private investors, who own 15 percent of EDF shares, are spooked: The stock is down 50 percent over the past year. On April 22, EDF said it plans to sell €4 billion in new shares to raise cash. News of the plan caused shares to drop even further.
It could provide 7 per cent of the country's electricity by 2025. But the design, intended to showcase the latest French reactor technology, poses engineering and financial problems that could create a costly morass for both countries.
State utility Électricité de France (EDF) is expected to build the plant and finance two thirds of the estimated £18 billion ($26.2 billion) cost.
That price tag assumes the Evolutionary Power Reactor (EPR), the next generation model planned for Hinkley Point, will be delivered on time and on budget. But that hasn't been the case in France and Finland, where EPRs under construction have run into multiyear delays and billions in cost overruns.
Plans for Hinkley Point are creating turmoil within EDF, which also needs to spend €50 billion ($56.5 billion) to renovate its network of French nuclear reactors by 2025.
In March, EDF's chief financial officer quit rather than continue with the U.K. project.
Ratings agencies have warned of a possible credit downgrade, and employee unions are threatening to strike. Private investors, who own 15 percent of EDF shares, are spooked: The stock is down 50 percent over the past year. On April 22, EDF said it plans to sell €4 billion in new shares to raise cash. News of the plan caused shares to drop even further.
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