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French energy group EDF has not yet found alternative investors for the flagship Hinkley Point C nuclear project as a freeze in funding from its Chinese partner places an “extra weight” on the debt-laden company.
Luc Rémont, chief executive of France’s state-owned electricity company, said it had held talks during 2024 with “lots” of potential funders for the Hinkley Point C project in Somerset, but was not yet able to proceed with any of them.
EDF was continuing to meet the financing costs but was working to find alternative investors for the project with the support of the British government, Rémont said, as the company reported its annual results on Friday.
“We have had lots of interesting discussions with lots of potential partners in 2024 that open interesting prospects but not enough yet so that we can move forward with some of those [proposals],” he said.
“In the current circumstances, the fact that our partner CGN is not injecting any more capital into Hinkley Point is . . . an extra weight for EDF,” he said, but added that the project remained a potentially profitable investment.
His comments raise further questions for the future of Hinkley Point C, the first new nuclear power station being built in the UK in a generation and a vital part of the government’s plan to decarbonise power supplies.
All but one of the country’s existing fleet of nuclear plants is due to shut down by March 2030.
Hinkley Point C was initially set to cost £18bn and to be completed in 2025, but the estimated cost has since swelled to roughly £46bn in 2024 terms while the start date has been pushed back to 2029 at the earliest, because of construction delays.
EDF is developing the project with Chinese state-owned CGN as a junior investment partner, which agreed to finance 33.5 per cent of the original costs.
However, CGN has balked at making further contributions to help meet cost overruns after the UK government in November 2022 bought it out of a sister project, Sizewell C in Suffolk, amid concerns about China’s involvement in critical national infrastructure.
In Companies House accounts for Hinkley Point C filed in August, directors said: “Shareholders were asked to provide additional equity on a voluntary basis in Q3 2023” to meet excess financing needs.
“Hinkley Point C funding is now through voluntary equity, to which only EDF is currently contributing.”
EDF said on Friday it had written down the value of the Hinkley Point C project by €1.1bn, linked to higher inflation. This follows a hefty impairment charge of €12.9bn on the project in 2023, when Rémont said he hoped the UK government could support financing of the project.
Talks over investment in Hinkley Point C comes as EDF and the UK government are also trying to drum up investors for the Sizewell C project in Suffolk, with the aim of a final investment decision in June.
In January, France’s state auditor said EDF should not proceed with the Sizewell project until it had cut its exposure to Hinkley Point C.
EDF has said it will not take a final stake of more than 20 per cent in Sizewell C.
“That one is about the British authorities getting people round the table and putting together the financial package to allow us to carry out the project.” He added that he hoped for a final investment decision this year.
Rémont’s comments came as debt-laden EDF reported a 16 per cent drop in sales and 8 per cent fall in earning, on the back of lower energy prices, despite an increase in its energy production.
The UK’s FTSE 100 energy company Centrica confirmed on Thursday it was interested in investing in Sizewell C if the terms were right.
Other potential investors include Schroders Greencoat, Emirates Nuclear Energy Corporation and Amber Infrastructure Group.
Asked on Thursday whether he was also interested in investing in Hinkley Point C, Centrica’s chief executive Chris O’Shea said: “We clearly like nuclear power. And I am open to any kind of conversation.
“My focus at the moment is on hopefully getting to a good place with Sizewell C.”
A spokesperson for the Department for Energy Security and Net Zero said: “Nuclear will play an important role in helping the UK achieve energy security and net zero, creating thousands of good, skilled jobs and supporting our energy independence. We are supporting the completion of Hinkley Point C, which will power six million homes.”
