Britain’s first new-generation nuclear power plant is likely to come online in around 2020 at the earliest, two years later than the initial start-up date, after construction risks and costs have risen, French bank Societe Generale said on Tuesday.
EDF Energy, owned by French power giant EDF, plans to build Britain’s next nuclear plant at a site in Somerset, but has admitted its schedule to start the plant in 2018 has slipped, without giving a new date.
“One of the reasons for these expected delays is the increased degree of security required for construction and during operations (…) All of these will translate in higher risks and costs, and have jeopardized nuclear competitiveness,” analysts at the French bank said in a research note.
New nuclear power plants will help supply the British power market in the next decade, but between then and 2016 the market faces a capacity shortage as old thermal plants shut and the start-up of new low-carbon capacity, such as coal plants fitted with carbon-capture technology, will be sluggish, the bank said.
Analysts expect baseload power prices for delivery in 2014 to rise 13 percent above current year-ahead levels to 63.50 pounds per megawatt-hour because supply margins are forecast to start tightening as old plant closures will surpass new build capacity.
“The UK may face more of a deficit from 2016, because of the long lead times to build new clean generation (namely, planned nuclear and/or coal CCS) and the likely retirement of a sizeable part of the thermal fleet due to the combined effect of plant age, market dynamics, and regulation,” SocGen analysts wrote.