CONSULTING

for the £16 billion (US$30 billion) overnight cost of construction of Hinkley C. 819 Since then, EDF
has repeatedly announced its intention to make a Final Investment Decision but by mid-2016, no
such decision had been taken, nor is one expected before September 2016. The key points of the
deal were a Contract For Difference (CFD), effectively a guaranteed real electricity price for 35
years, which depending on the number of units ultimately built, would be between £89.5 and
£92.5/MWh (US$152.6–157.7/MWh), with annual increases linked to the retail price index. The
completion date was put back from 2023 to 2025 with first concrete expected in 2019. There was
an expectation that construction would be primarily funded by debt (borrowing) backed by U.K.
sovereign loan guarantees, expected to be about £17 billion (US$26.9 billion). However, in
October EDF claimed it expected to finance its part of the finance from equity (own funds),
suggesting it would be “more efficient”. 820 EDF announced in November 2015 its intention to sell
non-core assets worth up to €10 billion to help finance Hinkley but by May 2016, no progress had
been made with these sales. 821 By May 2016, it was not clear, whether this was a choice or whether
it was forced on it by conditions imposed by the U.K. government it could not meet. The EDF CEO,
Bernard Levy, wrote to EDF employees in March 2016 saying EDF would not go ahead with
Hinkley “unless it gets more financial support from the French state.” 822 The type of financial
support required was not specified, leaving the option that French loan guarantees were sought
open.
The expected composition of the consortium owning the plant had changed from October 2013 to
October 2015. In 2013, it was expected to comprise EDF (up to 50 percent), two Chinese
companies, CGN and CNNC (up to 40 percent), and AREVA (up to 10 percent), with up to
15 percent still to be determined. In October 2015, the effective bankruptcy of AREVA made their
contribution impossible, the Chinese stake had fallen to 33.5 percent and the other investors had
not materialized leaving EDF with 66.5 percent. The October announcement mentioned only CGN
leaving the impression CNNC had dropped out, but in May 2016, CNNC made it clear they expected
to participate in the 33.5 percent Chinese stake. 823
One other new element was that the Chinese stake in the follow-on Sizewell C project would be
reduced to 20 percent leaving EDF with 80 percent. Given the problems EDF is having financing
Hinkley, this makes the Sizewell project appear implausible. However, EDF is allowing CGN to use
the Bradwell site it had bought as back-up, if either the Hinkley or Sizewell sites proved not to be
viable. CGN plans to build its own technology, Hualong One (or HPR-1000) at this site. 824 It expects
to submit the design to the U.K.’s Office for Nuclear Regulation (ONR) in 2016 for review under
819 The 2013 and 2015 figures are all in 2012 money unless otherwise specified.
820 The Telegraph, “New nuclear plant at Hinkley Point to begin construction 'within weeks'”,
21 October 2015, see http://www.telegraph.co.uk/news/earth/energy/nuclearpower/11945485/Nuclear-goahead-construction-of-new-plant-to-begin-within-weeks.html,
accessed 2 July 2016.
821 Financial Times, “EDF looks to sell €10bn of assets to boost balance sheet”, see
http://www.ft.com/cms/s/0/fcd6a462-7578-11e5-a95a-27d368e1ddf7.html, accessed 4 July 2016.
822 Reuters, “UPDATE 2-EDF says no new Hinkley Point reactors without more French state help”,
11 March 2016, see http://af.reuters.com/article/energyOilNews/idAFL5N16J4TT, accessed 18 June 2016.
823 The Times, “Chinese give Hinkley Point nuclear project a boost”, 9 May 2016.
824 CGN, “Agreements in place for construction of Hinkley Point C nuclear power station”, Press Release,
21 October 2016, see http://en.cgnpc.com.cn/n1017152/n1017227/c1141640/content.html, accessed
18 June 2016.
Mycle Schneider, Antony Froggatt et al. 194 World Nuclear Industry Status Report 2016