Utility Week

14 | 9TH - 15TH FEBRUARY 2018 | UTILITY WEEK Finance & Investment Analysis O n a wind-swept stretch of the Somer- set coast, almost 3,000 people are hard at work on one of the most ambi- tious construction projects ever undertaken in the UK. Once complete, Hinkley Point C will be the largest power station anywhere in the country, with its two 1.6GW EPR reactors providing enough power for around six mil- lion homes. Since their efforts began almost 18 months ago, trucks and diggers have moved more than four million cubic metres of earth – two-and-a-half times the volume of Cardiff 's Millen- nium Stadium on the opposite side of the Bristol Channel. The sprawling construction site, not long ago a verdant field next to the old Hinkley Point A and B nuclear plants, is now a sea of mud and concrete, stretching to the horizon in almost every direction. The network of underground tunnels, known as galleries, which will carry wires and pipes around the power plant, is now well under way, as is the jetty that will be used to ship vast quantities of building mate- rials directly to the site. Temporary accom- modation to help house the 5,000-strong workforce, which will soon be required, is nearing completion. EDF Energy is aiming to commission the project in 2025 – almost eight years aer for- mer chief executive Vincent de Rivaz infa- mously claimed British households would be cooking their Christmas turkeys using power from Hinkley. In a speech at its nearby training centre in Cannington, attended by Utility Week, his replacement Simone Rossi explains that the main focus on site is meeting the next major milestone in June 2019 – "J-zero" – when construction will start on the above-ground structures of the power station itself. Cost challenge As the first new nuclear plant to be built in Britain for a generation and the poster child for a touted nuclear renaissance, Hinkley has been bombarded with criticism, chiefly over cost. With offshore wind coming in at just £57.50/MWh in the latest contracts for difference auction, pressure is on the nuclear sector to offer a more competitive strike price than the £92.50/MWh deal secured by Hinkley. "We understand the message from the government on cost reduction and the need to be competitive for the next nuclear projects," says Rossi. "It is our job to meet the challenge and I think we can." Hinkley is currently projected to cost £19.6 billion to build – or £20.3 billion if completion is delayed until 2027, as parent company EDF has suggested could happen. But Rossi believes this cost could be lowered by as much as a fih for the follow-on project at Sizewell C in Suffolk. He hopes to achieve this by copying much of the design for Hinkley. "The key to reduc- ing the construction cost is replication," he explains. "Doing something again with the same design makes it easier and cheaper." Rossi highlights the example of the eight emergency generators that will eventually be installed at Hinkley: "They had to be designed and certified to meet the standards required for nuclear safety. That means the first two will cost £38 million, but the next six will be half the price – £19 million each. "At Sizewell, none of that develop- ment or certification work needs to be done again. All its emergency gen- erators will be at the lower price. Repeating that experience countless times for a power station at Sizewell that is largely identical to Hinkley Point C makes a capital cost reduc- tion of 20 per cent possible." He says the construction costs could also be lowered by reusing the existing grid connection at Sizewell, which was built to handle a much bigger plant than is currently Power in numbers EDF says replicating the design of Hinkley Point for Sizewell, and wind's rising integration costs, will enable nuclear to be competitive – if the financing can be got right. Tom Grimwood reports. "The key to reducing the construction cost is replication. Doing something again with the same design makes it easier and cheaper" 'Nuclear island' for the first 1.6GW EPR reactor at Hinkley Point C. Each of the two reactors will provide enough

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