Paul Flynn – 2015 Parliamentary Question to the Department for Energy and Climate Change

The below Parliamentary question was asked by Paul Flynn on 2015-10-22.

To ask the Secretary of State for Energy and Climate Change, if she will make an assessment of the (a) causes and (b) effect of the construction delays of reactors in China and France built by the proposed vendors of reactors planned for Hinkley Point C and Bradwell; and what assessment she has made of the implications for her policies on the construction of new nuclear power stations of these delays.

Andrea Leadsom

Delays at the Olkiluoto 3 and Flamanville 3 reactors have resulted from a combination of technical, regulatory and contractual reasons, many of which are unlikely to be repeated at Hinkley Point C due to differing regulatory regimes, improved contracting arrangements and in light of the experience that the developer is gaining from these projects.

In addition, there are strong commercial incentives built into the contract for difference to minimise construction delays and cost overruns. The Contract for Difference (CfD) Strike Price cannot rise if there are construction cost over-runs so any cost overrun would have to be borne by the Project’s investors. Further, low carbon payments under the CfD will only be made once the plant starts generating. The incentives are therefore on the developer to deliver the Project within budget and on time, and if it succeeds in bringing it in under budget, there is a construction gainshare mechanism to ensure sharing of any savings with the consumer.