Megaproject delays 'threaten UK energy supply'

Fresh delays to big energy projects including the £18bn Hinkley Point C and the £1bn Swansea Bay tidal lagoon are threatening the UK’s access to reliable energy, infrastructure expert Sir John Armitt has warned.

Armitt (pictured) told Building it was “clearly disappointing” the two megaprojects – which together would provide up to 8% of the country’s electricity – had been hit by further delays, adding this had put “more pressure” on the UK’s stretched energy supply.

This week EDF again put back its final investment decision on the Hinkley Point C nuclear power plant due to funding concerns, while last week progress on Swansea Bay tidal lagoon was thrown into jeopardy by a surprise government review of tidal power that could run until the autumn, potentially delaying agreement on a strike price.

A final investment decision on the Hinkley plant in Somerset could be several months away. Swansea Bay has already been delayed by a year, with the client body behind the project warning it will be delayed further if a strike price is not agreed with the government within “four to six weeks”.

EDF said on Tuesday it will extend the life of four of its existing UK nuclear plants across the north of England and Scotland for between five and seven years to help make up for the expected shortfall in power.

Armitt, who is a commissioner on the National Infrastructure Commission and a former boss of the London 2012 Olympic Delivery Authority, said: “Clearly over the next few years we will see a reduction in baseload [reliable] energy. The challenge is what we do about that. [The delays are] clearly disappointing and will only put more pressure on how we deal with that.”

In its full-year results on Tuesday, EDF insisted it was “fully ready” for a final investment decision and to start construction on Hinkley Point C, adding that “final steps are well in hand to enable the full construction phase to be launched very soon”.

A source close to the project told Building that EDF has reiterated its instruction to suppliers to start assembling their workforce as if a decision has been made.  

However, two economists told Building that even if a decision is taken immediately, it would still be months before contractors start working on site again.

Experian construction analyst James Hastings said: “You can’t just turn the tap on and off again with these projects. Most contractors who have contracts at Hinkley are unlikely to start reassembling their teams until a decision is made.”

Economics director at the CPA, Noble Francis, said: “We have main works only pencilled in for 2018 as further delays are likely.”