EDF Notes Revised Costs And Milestones

French utility EDF in late September announced progress at the Hinkley Point C construction project, including a successfully delivered J-O, the completion of the nuclear island “common raft” for the first unit, in line with the schedule announced in September 2016. However, the company has also conceded that cost estimates have risen for both Hinkley Point C and the Flamanville 3 project.

Hinkley Point CEDF said a recent project review concluded that the schedule for completing the common raft for Unit 2 (in June 2020) at Hinkley had been confirmed. However, the previously announced risk of COD delay of unit one and two (of 15 months and nine months, respectively), has increased and the projected cost for the project is now estimated between $23.61 billion and $24.71 billion, an increase of between $2.09 billion and $3.18 billion.

“The range depends on the effectiveness of action plans to be delivered in partnership with contractors,” EDF said.

Cost overruns began with earth works, reflecting the “challenging ground conditions” of the site, EDF said. The rate of return on the project has been revised subsequently to between 7.6 percent and 7.8 percent.

The timeline remains intact, however, with Unit 1 completion expected by the end of 2025. “To achieve this, operational action plans overseen by the project management are being put into place. These involve the EDF Group’s engineering teams in Great Britain and France, building contractors and equipment suppliers,” the utility said.

In France, the long-delayed Flamanville Unit 3 project ran into a serious glitch with the need to repair 66 welds at this late date in the project, which will bump costs by 14 percent to $13.6 billion, according to a Bloomberg report.

With the announcement, shares of EDF fell by 1.6 percent on the stock market, although half of that loss was regained by the close of market.

The net investment in Flamnanville 3 is now $17 billion. Costs for the project have tripled since the project began in 2007.

 

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