Hinkley Point C 'shovel-ready' despite construction delays
EDF Energy’s chief executive has insisted Hinkley Point C is “shovel-ready”, but CN has learned that the supply chain believes main construction work at Hinkley Point C could be delayed until the middle of 2013.
A source close to the project told CN that it had been told to expect main construction by the middle of 2013, but that further delays beyond that are not envisioned.
EDF Energy is yet to take its final investment decision on the multi billion nuclear project. Energy secretary Ed Davey also has to make a decision whether to grant consent for the development. He is due to receive the planning inspectorate’s report by the latest December 21 and will have three months to choose whether to grant consent.
That could mean Mr Davey’s decision could be made as late as the end of February. However CN understands EDF Energy and Centrica intend to push ahead with a final investment decision in 2012.
Local authorities in the area are not believed to know when construction is due to start, with preliminary works still outstanding and asbestos continuing to be removed from the site.
A source close to the project said: “[Finalising the contracts for difference) is holding up finalisation of business case on that. [The discussions] just keep pushing [construction] back. They are positive they will start digging holes, probably in the middle part of next year
“There is no doubt [the start date] has gone back couple of years.”
Speaking in front of the Energy and Climate Change Committee’s third public evidence session on ‘Building New Nuclear’, EDF Energy chief executive Vincent de Rivaz said the project team now numbers 800 people.
He said: “Our project team now numbers some 800 people. We are creating a world class team, including individuals who have worked successfully on delivering major projects such the London 2012 Olympics. By the end of this year the project will be ready for a Final Investment Decision.
“So we are ‘shovel-ready’. We are on the brink of delivering an infrastructure project similar in scale to the London Olympics. We are poised to deliver immense benefits in terms of jobs, skills and economic growth – locally and nationally.”
Speaking about the Laing ‘Rourke/Bouygues joint venture, which is preferred bidder for the £2bn main civils deal at the site, he added : “We are very confident in terms of jobs, headcount working on the project, the huge majority will come from the British side of this joint venture.
“[I] don’t expect bottlenecks. We have been engaging with the supply chain for three years and I am confident it will be on time and budget because of the supply chain.”
Mr de Rivaz insisted that construction risk for the project will not fall on the consumers. He said: “We need to be clear we will not start before we are ready but when we start we will not stop. The key issue is to have a stabilised design before we start construction. [We] need to reduce, mitigate and control construction risk… as a competent and efficient company.”
The chief executive was grilled on the cost of the strike price for contracts for difference, currently the subject of negotiation between DECC and EDF/Centrica, and the final cost of the nuclear plant, but gave little away, other than to say that reports of a £140 per MW-hour agreement were “ridiculous”.
Select committee:
The Hinkley Point C site will run to a workforce of around 5,500 at any one time. EDF estimates around 25,000 will come through and train or be inducted onto the site.
There will be around 400 apprentices on construction; 200 on operations
EDF will be looking to bring people in from the defence industry to the project
EDF expects to be able in the next few weeks to have a framework agreement in place between itself, the main contractors and the unions on employment
Vincent de Rivaz: We have learned from the Olympics that Britain has the capacity to deliver.
EDF has signed a £100m earthworks deal with Bam Nuttall and Kier. It refused to comment on reports of delays to the earthworks deal earlier this year. The energy firm appointed a Laing O’Rourke/Bouygues joint venture as preferred bidder for the £2bn main civils package at Hinkley. It is unlikely to sign the final main civils contract until 2013.
Remediation work at the site is expected to be completed by the end of the year. Site preparation work at Hinkley Point C began in February 2012.
The energy giant has yet to agree to its contracts for difference with the government, ahead of the form of Feed-in Tariff being launched in 2014. Decc has been in talks with EDF to reach agreement on the proposed CfD which is not due to be agreed till 2013, but is pressing in EDF’s case as it seeks to progress the first new nuclear reactor in the UK.
EDF has insisted it will set out a construction timetable after it makes its final investment decision but local authorities are hoping to receive an indicative timetable before the end of this year.
Energy secretary Ed Davey refused to offer an update on Decc’s discussions with EDF last week when speaking at an event on energy policy hosted by Deloitte and the CBI. He said talks are “commercially sensitive”, but insisted that there was no “plan B” in place in case the talks fail, because “they are not going to fail”.
He said: “I’m not going to talk about commercial decisions, whether it’s with EDF or other developers but yes the idea is that there will be a strike price [for CfD].”
Asked whether the government would consider financing the construction risk on the project, Mr Davey said: “For a contract as difficult and as large as this one you don’t expect EDF to give a running commentary and you won’t get one from us.”
EDF declined to comment on delays to construction when contacted by CN.