3 Dec 12

Statement from EDF Energy in response to announcement on construction costs at the Flamanville EPR in France

EDF Group in France today gave an update on the construction costs at Flamanville , the first new nuclear power station to be built in France for 15 years, and the first EPR built by EDF (please click here to view the Group press release).

Cost estimates given to the UK government by EDF Energy for the construction of the proposed new nuclear power station at Hinkley Point in Somerset already include the lessons learned from Flamanville. They also allow for the specific conditions at Hinkley Point C and in the UK, including engineering, site and labour costs for the first UK nuclear build since 1995.

EDF Energy has always been clear that it is not asking customers to take on any construction cost risk at Hinkley Point C.

The following factors will also help control costs at Hinkley:

  • EDF Energy’s 800 strong team for Hinkley Point shares experience from 50 nuclear projects around the world, as well as delivery of the Olympics and Terminal 5. The project is “shovel-ready” and key contractors are already closely involved in the project.
  • A detailed engineering plan which means that the project will start when all elements are ready for the work to continue without interruption to the finish
  • The intense process in the UK to complete a Generic Design Assessment (GDA) for the joint regulators. More than 800,000 hours of engineering studies have already been completed on the EPR design which will give the project a stable design with known costs.
  • Work done in France to recreate the industrial capability in new nuclear, following a 15 year pause in construction. Flamanville is the first of a kind and EDF Energy in the UK will use lessons learned in its construction

EDF Energy has been working with Government to agree a Contract for Difference which will provide a price for energy which balances the interests of consumers and investors. The process requires that EDF Energy and Government establish costs before the project begins. These costs have been made available to the Government where they are being scrutinised to ensure they represent value for money and fairness.

EDF Energy will make public cost estimates and timelines for Hinkley following an investment decision. As the Government made clear in documents supporting the publication of the Energy Bill, the figures will be published in a way that is open and transparent for all to see.

The company remains focussed on having the main components of an investment case in place. The Nuclear Site License (NSL) has already been granted, and the company is now looking forward to the following steps being achieved before the end of the year:

  • The Design Acceptance Certificate (DAC) issued to close the EPR Generic Design Assessment (GDA).
  • Recommendation to the Secretary of State by the Planning Inspectorate on the planning application for Hinkley Point C.

The objective remains to have the relevant agreements in principle on the CFD in parallel.

All these elements must be in place to reach the final investment decision at the earliest possible date.

Managing Director of Nuclear New Build at EDF Energy Humphrey Cadoux-Hudson said: “EDF Group is steadily rebuilding and revitalising the skills, know-how and technologies of the nuclear industry, and the lessons learned will allow us to successfully deliver major projects here in the UK. The economic benefits will be long lasting in jobs and skills, as well as in securing the low carbon energy the UK needs.”