Guardian: “The future of the Hinkley Point C nuclear plant in Somerset is under a cloud amid a financial crisis at Areva, a shareholder in the project and the designer of the proposed reactors.
“Shares in the French engineering business plunged by almost a quarter after Areva warned it must suspend future profit predictions because of problems centred on a similar power station project in Finland.
Both that scheme at Olkiluoto and another at Flamanville in France are massively over-budget and over-schedule, forcing Areva to consider whether it needs an injection of new cash to survive.
Peter Atherton, a leading energy company analyst at Liberum Capital in the City, said Areva appeared to be in deep trouble and this must be a matter of grave concern to the British government.
“If I was sitting in Whitehall this would scare the daylights out of me. Areva is designing and building the first two EPRs [European Pressurised Reactors] inEurope and both projects have gone disastrously wrong.
“The [UK] government has commissioned the most expensive power station in history and the only company that can provide the equipment is in trouble. That is a big problem for Hinkley.”
As well as providing the design, Areva currently holds 10% of the equity in the Hinkley Point C project, which has been predicted by the European commission to cost almost £25bn – if it is built on time by 2023. EDF holds 45%-50%, with Chinese state nuclear companies holding the remainder.
EDF, like Areva a largely French state-owned group, is already known to be talking to Saudi Arabian and other potential outside investors who are needed to bolster Hinkley’s ownership and financial position.
Atherton believes it is unlikely that Areva will ever collapse financially because the French state can be expected to bail it out rather than lose 45,000 jobs and a corporate flagship for Gallic atomic power ambitions.
Areva declined to comment directly on Hinkley or the scale of its financial problems when contacted in Paris but earlier in the day the group put out a formal written statement in which it blamed continuing delays to its Olkiluoto project and a wider slowdown in nuclear work for its difficulties.
It said it was facing “market conditions which remain unfavourable” and it was conducting a strategic review.
The sense of crisis at the company, which has issued a slew of profit warnings over recent years, was heightened last month when Luc Oursel, the chief executive, stepped down for health reasons.
….The domestic market in France has also been hit by uncertainty because the government of François Hollande has made clear it wants to concentrate more heavily on renewable power in future.
Hinkley Point would have the first new reactors built in Britain for more than 20 years and the government has provided it with a generous but controversial subsidy regime that was recently given the green light from the competition authorities in Brussels.
EDF and Areva have not yet taken a formal decision to proceed with the scheme but that was expected to take place around the turn of the year and early construction work is already under way in the West Country.”
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