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Nuclear power bows to inflation, Covid, and Brexit pressures

Hinkley

Since Brexit, Covid-19, and the Russian invasion of Ukraine, inflation has caused the cost of materials, fuel for transport, and labour to skyrocket. For a project such as Hinkley Point C, the 3-gigawatt behemoth from developer EDF, costs are expected to rise by a third before a single watt of power is generated.

At the very beginning of Hinkley Point C’s journey, developers were cautiously optimistic. In 2007, the then chief executive of EDF believed the project could be scoped, greenlighted, and built within a decade. He was famously quoted as saying “by Christmas in 2017, turkeys would be cooked using electricity generated from atomic power at Hinkley”. Initial costs were projected to be £18bn, financed by EDF (66.5%) and the China General Nuclear Power Corporation (33.5%).

7 years on from that target date, that cautious optimism has fizzled into a nervous whisper.

The target date is slipping further and further back into the 2030s, and if the cost predictions are adjusted for inflation, they could reach an eye-watering £46bn. Whilst UK bill payers will not shoulder the additional costs for Hinkley Point C, the same cannot be said for EDF’s upcoming Sizewell C plant in Suffolk; £1.7bn in taxpayer money plus a surcharge on customer energy bills will be used to fund it, plus a further £1.3bn of government money that was promised in January 2024. However, EDF have been in discussions with the UK government in recent weeks to try and plug the “multibillion-pound hole” in Hinkley’s finances.

Nuclear power has become the ‘darling of net zero’, despite critics arguing that its low-carbon credentials do not outweigh the high costs, environmental impact, and safety fears. The UK government has recently launched a roadmap that sets out the biggest expansion of nuclear power in 70 years, as they aim for 24GW of nuclear by 2050. It remains to be seen whether this figure is either affordable or achievable.

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