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Delays to new nuclear projects see CITB and Experian forecasts cut

Changes to new nuclear outlook in the National Infrastructure Pipeline will have an impact on industry forecasts after three major projects were put back by at least three years.

Wylfa Aerial CGI View CREDIT Horizon Nuclear Power

Nuclear delays hit forecasts

Source: Horizon Nuclear Power

Aerial CGI of Wylfa

Last week’s updated NIP showed revised dates for all three projects: Hinkley Point C, Moorside, and Wylfa Newydd.

In the previous NIP, published in July 2015, Hinkley Point was factored in from 2015/16, with subsequent investment of £2.08bn expected per year from 2016/17 through to 2020/21. But the updated pipeline has works beginning in 2018/19.

Works at Wylfa were slated to begin in 2018/19, with £1.5bn in the pipeline for that year, followed by £2.25bn in both 2019/20 and 2020/21. However, the new pipeline points to the project’s £14.77bn cost being factored in from 2021/22 onwards.

Speaking to Construction News, Experian head of construction futures James Hastings said he was “not surprised” that Hinkley had been pushed back, with enabling works expected to recommence in 2018 at the earliest.

“The delays to Hinkley Point will lead to downgrade in our spring forecasts. We had previously factored work in from mid-2017,” he said.

A final investment decision on the project has been promised by May this year.

However, Mr Hastings added that he was “surprised that Wylfa has been pushed back so far”, especially given the argument that it was previously earmarked to “leap-frog Hinkley” due to its lower build costs.

“It’s a more tried and tested technology and is cheaper to build. The main stumbling block to an early start would be the strike price negotiations,” he said.

The changes in expectations around Wylfa could also impact skills forecasts. The CITB has forecast that construction output in Wales will grow by 7 per cent per year between 2016 and 2020, with Wylfa and Swansea Bay Tidal Lagoon contributing heavily to this growth.

CITB head of policy Gillian Econopouly said that the forecasts anticipate the start of Wylfa from 2019.

“If the project is pushed beyond 2020, the growth forecast for Wales during 2016-2020 drops back to 3.7 per cent, and the gains from Wylfa would be pushed into the next forecast period,” she said.

“However, at 3.7 per cent, Wales still outperforms the UK, which is predicted to grow by 2.5 per cent annually. While delays to Wylfa are disappointing, if the project goes ahead, it still provides a huge boost to construction and the wider economy in north Wales.”

The CITB Skills Network Report had also highlighted Wales as the fastest growing region in terms of employment in construction, again due in part to demand from Wylfa.

Employment in construction was expected to grow by 15.6 per cent between 2016 and 2020.

There have also been delays to Moorside, which was forecast last year to start in 2019/20 with a £1.39bn investment, followed by £2.09bn of investment in 2020/21. All of its cost is now factored in from 2021/22.

 

 

 

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