In October last year I wrote Is Nuclear Energy Profitable? and how it is profitable until things go wrong. And then it is spectacularly not profitable. And that assumes a project comes in on budget in the first place.
Now, as reported by Charles Arthur citing an article in the Financial Times, industry sources estimate the cost of building Sizewell C to be close to £40bn, double the £20 billion estimate from 2020.
The government has already allocated £3.7 billion but has not updated the cost estimate because of “commercial sensitivity”. Interesting phrase and I wonder what can really justify not disclosing an updated figure.
So why the increase? The report cites rising construction costs and delays, including lessons from Hinkley Point C’s overruns and it says it raises questions about the government’s nuclear revival strategy because of the state of the UK economy. That of course means they won’t be able to pay for it.
EDF, which is leading the project, say that once Sizewell C is operational, it could supply electricity to 6 million homes for 60 years but because of the increase in costs, they are looking for more investors.
I don’t understand how an estimate done at one point in time for a project that will take years, does not already take into account rising construction costs. Isn’t that what estimates are?