EDF’s Business Announcements Highlights To NFLA The Real Contradictions In UK Nuclear Policy And The Need For A Rethink

NFLA media release – for immediate release, 16th February 2018

The Nuclear Free Local Authorities (NFLA) notes a number of contradictory issues in the debate over nuclear power in the UK after various announcements today by EDF, the company that runs a number of UK power stations and hopes to build new nuclear reactors at Hinkley Point and Sizewell.

The media has led in most bulletins today on the announcement from EDF that it is seeking to extend the operating life of nuclear reactors at Heysham, Hartlepool and Torness. This has been welcomed in the media as a positive announcement in ensuring the UK’s security of supply. Heysham 1 and Hartlepool nuclear power reactors will have life extensions of five years until 2024, while Heysham 2 and Torness will see their life extensions pushed on by seven years to 2030.

At the same time, EDF announced that its 2015 profits fall 68% to €1.18bn. The BBC noted that this is mainly due to write-downs on coal—fired plants. These results were seen as below analysts‘ expectations. As a result= EDF has announced it will cut its dividend by 15 cents to €1.10 3 share. EDF has seen its shares fall almost 25% since the start of 2016, and by 50% from a year ago.

For the tenth time in the past two years. EDF also failed to make its final investment decision for the Hinkley Point C plant. instead it said: “Hinkley Point C is a strong project which is fully ready for a final investment decision and successful construction. Final steps are well in hand to enable the full construction phase to be launched very soon.”

NFLA note the comments made by Dr Paul Dorfman of the UCL Energy institute on BBC Radio 4‘s Today programme this morning: “Unfortunately, with the best will in the world, it may just not happen. Chris Bakken, the man charged by EDF to construct Hinkley Point, has quit to spend more time with his family, EDF shares have crashed to half their value a year ago; the budget for Hinkley alone is bigger than EDF‘s entire market value. Areva – EDF’s construction arm — has been bankrupted by the huge costs and time overruns for the same brand of reactor they want to build at’Hinkley, so it seems there’s a good chance that it simply may not happen.” (1)

Any life extensions to EDF’s nuclear reactors will need to be approved by independent nuclear regulators. NFLA is concerned that the proposed life extensions will take such reactors beyond forty years of operation. Current examples of similar aging reactors in Belgium have been found with worrying cracks in parts of their reactors. They are now subject to a legal challenge by non governmental organisations and Dutch and German cities. NFLA will be closely monitoring this issue with the regulators. (2)

For NFLA, the life extension announcements could also be seen as diverting attention from the problems EDF has in making a final investment decision for Hinkley Point C. EDF has to make a number of expensive energy decisions in its merger with Areva, it has to pay significantly more now for radioactive waste management and nuclear decommissioning in its core French market and it is trying to overcome safety issues affecting the identical EPR reactor being built in Flamanville, France. Despite the substantial financial support to the Hinkley C deal from China and the UK Government, EDF is still well off making such a decision, if it can ever do so.