EDF Moves Closer to Second New Nuclear Project in Britain
EDF Moves Closer to Second New Nuclear Project in Britain
(Bloomberg) --
Electricite de France SA’s ambition to be a superpower in nuclear plant construction is now a step closer with its 16 billion-pound ($20 billion) Sizewell C station in Britain moving to the next stage of the construction process.
The so-called Development Consent Order marks the end of eight years of preparation by EDF and will now be considered by the U.K. authorities.
The next step is obtaining planning permission, and the French company could receive a final investment decision from the government by November 2021. Sizewell would be the second new nuclear station to be built by EDF in Britain and will also create as many as 25,000 jobs.
Britain’s nuclear sector is a key part of the government’s industrial strategy and part of its plans for a carbon-neutral economy. Its support of new nuclear runs counter to other European countries. Germany will shut its last stations in 2022, and even France, the home of atomic power in Europe, has announced plans to scale back.
“Sizewell C is a net-zero infrastructure project ready to kick-start the economy following the coronavirus crisis,” said Humphrey Cadoux-Hudson, EDF’s managing director for Sizewell C. “The project will play a key role in lowering emissions while helping the U.K. keep control of its low-carbon future.”
EDF, along with partner Chinese CGN Power Co. Ltd., is the only company building new nuclear stations in Britain. While its other project, Hinkley Point C, is taking longer to build and costing more than planned, Sizewell C is a copy which should make it 20% cheaper to build, according to EDF.
Construction of the 3.2-gigawatt station will take about 10 years after planning approval and provide about 7% of the U.K.’s electricity, enough for about 6 million homes.
EDF needs a successful example it can showcase to make up for mishaps at its Flamanville plant in France that is 10 years behind schedule.
In 2016, EDF brokered a deal with the government to guarantee 92.50 pounds a megawatt-hour for the power produced from Hinkley for 35 years of operation. While the strike price falls to 89.50 pounds if a final investment decision is taken on Sizewell C, it’s still almost triple this year’s average wholesale rate for month-ahead power at a time when the rise of renewables is driving electricity costs ever lower.
The government has said that the financing model does need to change. It has been considering a Regulated Asset Base model in which the taxpayer is liable for some construction risks, which would help get private-sector financing at a lower price. The results of a consultation on this model are expected this summer.
EDF Sizewell application was delayed by two months due to circumstances created by the coronavirus, EDF said.
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