EDF Actionnariat salarié (EAS) employee-shareholder association has expressed deep concern with regards to the viability of the energy giant’s Hinkley Point C nuclear power plant plans, claiming that the project’s costs and risks are so high that they threaten the survival of the company.
The association released a statement in which it claimed that the project was a “financial catastrophe foretold” and that “the financial risks are too big for our company and…could put EDF’s very survival at risk.” Staff at EDF own a 1.72% share of the company, the second largest stake in the company after the state who own 84.5%.
The plan to build a nuclear power point at the Hinkley site in Somerset has been fraught with complications since the very first days of its conception. Delays in construction plans and hesitancy from investors were exacerbated by constantly rising costs and general concerns over the viability of the European Pressurized Reactor model that will power the plant. The first two EPR projects undertaken in Europe (in Finland and France) have both been facing expensive delays and are not expected to be finished until 2018, while two in China have had their completion dates pushed back from 2014 and 2015 to 2016 and 2017.
Despite constant hiccoughs throughout the plans’ development, things started to look up for EDF after they managed to secure backing via a strategic partnership with Chinese state-owned energy company CGN. The deal involved CGN provided £6 billion of the total £18 billion cost, receiving a third stake of the project in return. It was also revealed that EDF have been considering selling off a further 15% stake in order to raise further capital, leaving it with just a 55% holding in the plant.
The EDF-CGN partnership however is still yet to be fully finalised and so currently, the full financial burden is resting upon EDF already strained shoulders. And it’s not the only weight they are having to carry at the moment. EDF’s nuclear arm is to be upgraded over the next year at a cost of around £39 billion, in addition to the £3 billion or so they will be spending on installing smart meters in the homes of their customers over the next few years.
While shareholders are concerned about EDF’s ability to carry the weight of the Hinkley project, there are a fair few independent bodies who have sung the project’s praises, especially in terms of the positive effect it is likely to have on the local economy and job market. According a spokeswoman for the Royal Institute of Chartered Surveyors, various small firms and businesses in Wales stand to benefit from the plant being built.
According to EDF’s own figures, the plant will be responsible for the creation of around 25,000 jobs, though some owners of small building firms are concerned about the effect it will on the cost of their own wages, as workers will be more drawn towards the higher wages offered by EDF at the Hinkley power plant.
EDF are yet to release a public response to the EAL’s letter, but as time goes on they will be expected to offer some kind of final word on the status of the controversial nuclear power station plans.