Britain’s Nuclear Energy Farce Worsens
EDF has been warned that going ahead with its vastly expensive Hinkley Point project will tip it towards a downgrading of its credit rating. This would raise the cost of financing the £18 billion that the company needs to build the world’s most expensive nuclear reactor.
Moody’s, the credit rating agency that put EDF on notice of a potential downgrade last month, said that the project would have to be “mitigated” by the French company raising capital and cutting its debt. It is almost impossible that EDF would find an additional partner to help to share the financial burden with CGN, its existing Chinese backer.
The Hinkley project is facing mounting criticism on both sides of the Channel after the departure of EDF’s chief financial officer over his misgivings.
The deal secures EDF a price of about £90 a megawatt hour, linked to inflation, for 35 years — about treble the present price of wholesale energy.
At the centre of the uncertainty is the European pressurised reactor (EPR), an unproven technology that has attracted the concerns of the French regulator over its deployment at the Flamanville project in Normandy.
An EPR plant in Finland has also been beset by delays and overruns.
Paul Marty, an analyst at Moody’s, said: “There’s quite a lot of uncertainty around the ability to build this plant — everyone is waiting to see what happens with Flamanville and Olkiluoto in Finland. That’s not going to happen in the near term.”