Amid mounting pressure to reach a decision regarding investment for its controversial Hinkley Point nuclear reactor, French energy giant EDF has announced that they will be extending the life of four of its existing nuclear plants by five to seven years.
The four plants that will be kept open for longer are: Heysham 1 and Hartlepool, both with five year extensions pushing their closure date back to 2024; and Heysham 2 and Torness, both with seven year extensions pushing their closure date back to 2030.
As well as saving the jobs of the 2,000 permanent members of staff and 1,000 contractors who work at the four plants, the decision to keep these reactors active will significantly improve our energy security as a country – these four plants collectively supply electricity to a quarter of Britain’s households.
However, the decision comes at a time when EDF’s accounts are in turmoil, and so too are the ever changing plans regarding the new plant at Hinkley Point C.
Last year, EDF’s profits fell by 68% to €1.18 billion, and their share prices have fallen by almost 25% since the beginning of 2016.
EDF’s chief executive, Vincent de Rivaz, dismissed any worries that EDF’s drop in capital would affect the company’s capability to keep these plants open, and maintained that the necessary “safety reviews” had been conducted.
He said: “Out continuing investment, our expertise and the professional relationship we have with the safety regulator means we can safely prolong the operating life of our nuclear power stations.”
EDF also announced publicly that they were getting closer to reaching a final decision on the investment for the Hinkley Point reactor. However, internal reports appear to tell a different story.
A large barrier in the way of the completion of the plant is the cost of it. EDF needs to raise some €12.4 billion in order to build the two reactors that will power the plant – an amount that actually exceeds the total stock value of the company.
Various commentators have described the project as too problematic, after countless delays, added expenses and worries over investment. A final decision still awaits regarding investment from
Chinese nuclear firm CGN, who will take a stake of 33.5% in the project, should their investment be secured.
Greenpeace have been very vocal critics of the Hinkley Point project, even going as far as projecting a large image onto the Houses of Parliament with an portrait of George Osborne next to the message “Let it go George, everyone else has.”
Greenpeace’s policy director, Doug Parr, said: “EDF’s accounts show growing debts and falling earnings. Hinkley is a bad investment and most people with an ounce of financial acumen have now come to realise this. George Osborne stands alone in defending Hinkley’s honour.”
The project also came under fire from Paul Dorfman at UCL’s Energy Institute. His concerns were grounded in financial issues. He said: “with the best will in the world, it may just not happen.
EDF shares have crashed to half their value a year ago; the budget for Hinkley alone is bigger than EDF’s entire market value.”
EDF themselves, however, have unsurprisingly remained (at least publicly) optimistic. A statement released by the energy giant read: “Hinkley Point C is a strong project which is fully ready for a final investment decision and successful construction. Finals steps are well in hand to enable the full construction phase to be launched very soon.”