Just think of the warm glow that’ll bring to the residents of Heysham, Hartlepool and Torness: the lifespan of the local, ageing nuke extended for up to seven years. And all thanks to EDF Energy, the state-backed French outfit that still can’t decide whether the bribes are big enough to build Hinkley Point C. All perfectly safe, too, apparently, what with Britain’s Office for Nuclear Regulation on the case: the same one, incidentally, without a full-time chief nuclear inspector and whose brand new chief executive has zero experience of the industry, as you might expect from the ex-deputy leader of Hull city council. But at least EDF is in cracking shape: net debts of €34.7 billion versus a €20 billion market cap, annual net income down by two thirds to €1.2 billion, a surprise dividend cut and so cash-strapped to need a “de facto” €1.8 billion capital-raise, to quote the group’s chief executive Jean-Bernard Lévy. Hinkley, supposedly costing £18 billion to build, is an even bigger rip-off than it seemed. Assuming EDF ever does sign up with its Chinese partner, it will get an index-linked £92.50/MWh for 35 years. Or, to put it another way, David Cameron is proposing to pay EDF almost three times what it currently needs to make a profit out of UK nuclear just for building the thing — and to beyond 2050. If Mr Cameron really is hell-bent on a last-century grand project like Hinkley, it would be far cheaper to use historically low borrowing costs to build it ourselves and regulate the operator’s returns. Instead, Britain is planning to enrich EDF. Why are we signing up to such a financially radioactive deal?
Times 17th Feb 2016 read more »