Panic inside EDF board puts Hinkley power station at risk
Reports of unprecedented dissent and panic amongst the EDF board have been reported ahead of tomorrow’s board meeting.
It is understood that the decision whether to invest £24.5 billion into the Hinkley power station in Somerset hangs on a knife edge. A key management level trade union, CFE-CGC, who sit on the board, have issued 15 questions raising financial, legal and strategic concerns over whether EDF can afford the project, or deliver it on time.(1)
The manager’s union also points to the high level of financial risk as EDF’s total market share value is less than the cost of Hinkley. Separately, an association of employee-shareholders (EAS) (2) recently said the project to build two nuclear reactors in Hinkley Point, Britain, is so expensive and so risky that it puts the survival of the French utility at risk.
EDF’s share price has tumbled questioning whether it has the borrowing power to finance the plant. It has fallen least 50% over the past 12 months, leading to its ejection from the top tier of the French stock market to be replaced by a shopping centre and investor confidence is low.
Aside from the potentially crippling financial concerns, questions are being raised regarding the quality of EDF EPR reactor itself.
Doug Parr, Greenpeace Chief Scientist said:
“EDF and George Osborne might want us to think Hinkley is the newest and shiniest car in the showroom but they are selling us a clapped out old banger that has failed its MOT three times already. The three EDF reactors that already exist in Finland, France and China haven’t even proved they can work. They use the same technology planned for Hinkley, but all three have faced severe delays and spiralling costs. EDF’s managers and employees are completely bewildered as to what makes EDF and the British government so confident that they are willing to bet billions of pounds on fourth time lucky.”
The French Nuclear Safety Authority (ASN) has also been very blunt about some of the safety issues of the reactor in Flamanville, saying the safety problems were not spotted by EDF/AREVA “it seems relatively worrying and this immediately raises the question of whether there were other abnormalities that would not have been detected.”
Greenpeace suggests that, should it actually go ahead, detecting such problems in the Hinkley reactor therefore require oversight from the Office of Nuclear Regulation which was recently reported to be ‘in meltdown’ and struggling to recruit experienced staff.
Hinkley was originally conceived as a ‘showcase’ for EDF’s EPR reactor. But EDF’s chief executive agrees that the troubles at the other reactor sites are scaring off investors, and he said “the troubled European Pressurised Reactor (EPR) technology is to be ditched by EDF for future projects” .
The UK government is reversing its ‘no public subsidy for nuclear’ policy to back Hinkley and have said the agreed price to buy power from Hinkley at double the current market price, and higher than is now needed for onshore wind and large-scale solar. Government justifies this by arguing that the technology is the ‘first of a kind’ , ignoring the three failing projects and that it is likely to be the last of its kind as well.
Dr Doug Parr continued:
“Hinkley will be one of the most expensive objects on earth. This year’s school leavers, who can’t vote for or against it, will still be paying for it as they approach pension age. This is little more than a vanity project for George Osborne. Consumers will now pay more on their energy bills in order to subsidise new nuclear power for 35 years. This is after years of promising that no subsidy would be required.
“Osborne is not willing to support cheaper energy sources such as onshore wind that could be subsidy free. This defies economic and environmental sense.”
Notes to editors
2. EAS http://www.theguardian.com/environment/2015/nov/13/hinkley-point-nuclear-plan-puts-survival-edf-at-risk-say-employee-shareholders
More details about the three EDF EPRs already in existence
a) Olkiluoto – expected to be a decade late and cost of €8.5bn compared to the original AREVA plan of €3 and coming onstream in 2009.
b) Flamanville – expected to be operational in 2018 (but see below) at cost of €10.5bn compared to original budget of €3bn and start date of 2012.
c) Taishan – issues with the Chinese site are less well documented although construction delays have beenacknowledged and an HSBC report on the justification for Hinkley said that delay was 3 years. It is not clear whether the quicker (but still delayed) build in China could be accomplished with lower expectations around labour conditions in Europe.