The projected cost of new nuclear power has risen by fourfold since 2008 – and it is still rising

The projected cost of new nuclear power has risen by almost fourfold since the UK Government made estimates in 2008, and the cost is still rising. Nuclear analysts warn that the cost to consumers of funding Sizewell C through the so-called ‘Regulatory Asset Base’ (RAB) model will be much higher than has been projected by the Government.

In 2008 as the Government argued for more nuclear power stations to be built, the Government, in a White Paper on nuclear costs, said that each 1.6 GWe EPR reactor would cost around 2.8 billion. But the most recently released (by EDF) cost of the Hinkley C EPR double reactor is £25.5 billion (in 2015 prices)  and assumes the plant will be completed by 2027. This equates to £12.75 billion per each 1.6 GWe reactor, as reported by World Nuclear News. This is nearly four times the estimate made by the UK Government in 2008 after inflation is taken into account.

What makes these figures even more alarming is that the latest EDF figure for Hinkley C is for a project that is still only partly built, with the fear that costs will carry on rising. The likelihood of further cost overruns is underscored by the fact that, as reported by Bloomberg earlier this year, EDF is requesting that the Government change the terms of its contract with EDF. This would allow Hinkley C to start generating after 2030 without losing income from its premium price contract. This implies that Hinkley C will incur massive further cost overruns as it does not start until 2030 or later.

At a session of the All-Party Parliamentary Group on Energy Costs on November 23rd nuclear costing expert Professor Steve Thomas poured scorn on the UK Government’s estimates of nuclear power costs. He said that the costs to the consumer of the RAB mechanism are likely to be much higher than the Government projects. The planned Sizewell C project is set to be funded using the RAB. ‘I have no confidence in the (Government) to get things right. I have seen no evidence that they have got any better (since 2008). They are still making schoolboy errors’.

Paul Dorfman, from the Nuclear Consulting Group, commented that the much touted small modular reactors were very expensive. ‘The US Nuscale small modular reactor costs have nearly doubled despite being heavily subsidised (by the Government). Lazard has nuclear at $151 per MWh compared with renewables at $41 per MWh. It’s not just that nuclear power is so expensive, it is too inflexible to ramp up and down a renewables future.’

By David Toke

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