John Sauven: George Osborne’s reputation as a master political tactician may have gone the way of Leave’s £350m a week for the NHS, but the spectre of his misguided energy policy could haunt Britain for decades, and at Hinkley in north Somerset, for millennia. Theresa May’s government urgently need to seize the opportunity to minimise the damage, an opportunity which only lasts while her government can portray them as the last regime’s errors, and disown them. This week we learned that the UK has lost 12,000 jobs in the solar industry. This economic disaster was due to Osborne’s ideologically driven subsidy cuts to what was a vibrant and growing sector of the economy. The ideology in question was not opposition to state subsidies, of course. Hinkley C has now become so uneconomic that it has been condemned in editorials in the normally pro-nuclear Times, Telegraph and Mail, and many EDF executives and employees think it might be a bad enough plan to completely destroy the state-owned utility. On Thursday EDF’s board will make a widely trailed decision on whether to proceed with this “investment”. After years of delay, this unseemly hurry looks a bit like panic. To be clear, the Hinkley subsidies are not bungs to power brokers or inexplicable government largesse; Hinkley’s problems are so severe and so numerous that it requires potentially illegally high levels of state support in order for it to be built. Listing them all – the legal risks, the engineering risks, the liability risks, the credit risks, the safety risks – would take so long there would probably be some new ones before I’d finished. But they all spring from a reactor design, which has so far proved impossible to make work, and has even been described as “unconstructable” by an engineering professor. One of the few arguments Hinkley’s defenders had left was that offshore wind, a technology that has the potential for huge amounts of power, but has received a tiny fraction of nuclear’s research and development outlay in both time and money terms, was still more expensive than Hinkley. However, even this last advantage has now evaporated. The NAO has claimed this month that new offshore wind would actually be cheaper than new nuclear energy, a claim confirmed by Danish firm Dong Energy building two offshore windfarms for €72.70 (£61.10) a megawatt hour, compared to Hinkley’s £92.50.
Guardian 27th July 2016 read more »
EDF shareholders have signed off on a €4bn equity fundraising to help pay for the Hinkley Point nuclear power plant in Somerset, southern England — a project that the company expects to approve on Thursday. Investors agreed to the financing package on Tuesday, with the French state, which owns 85 per cent of the indebted company, agreeing to subscribe to €3bn-worth of the new shares. EDF’s agreement paves the way for its board to make the long-delayed final investment decision on the £18bn nuclear power plant at Hinkley Point.
FT 26th July 2016 read more »
Burnham-on-sea.com 27th July 2016 read more »
Reuters 26th July 2016 read more »
One third of the £18bn capital costs of the project are being met by Chinese investors, but Hinkley Point remains an enormous undertaking for the stressed French company and has been criticised by French unions. he UK government has guaranteed a price of £92.50 per megawatt hour of electricity – more than twice the current cost – for the electricity Hinkley produces for 35 years. Wholesale energy prices have fallen since the price was agreed, leaving the government to make up the difference. The UK’s National Audit Office estimated future top-up payments would rise from £6.1bn to £29.7bn over the length of the contract.
BBC 27th July 2016 read more »
The six labor-union representatives sitting on EDF’s 18-member board have repeatedly opposed the project. They wanted to see it delayed by three years to give EDF time to complete the construction of similar reactors in France, Finland and China, which are several years behind schedule. The company’s works council secretary, Jean-Luc Magnaval, told the news agency Reuters that his union had filed a complaint on the matter with a Paris court, which has scheduled a hearing on the case for August 2. A variety of Generation 4 reactor designs, which engineers hope will be more inherently safe and more cost-efficient than previous generations, are in various stages of prototype development, but none are expected to be commercially available before about 2030 or 2040. By that time, however, renewable energy technologies and battery storage systems may have attained such a low cost that construction of new nuclear power stations may prove a tough sell financially. That’s already the case for the Hinkley Point C project and for EDF’s other three existing EPR reactor projects around the world, all of which have proven to be far more expensive than optimistic early estimates, and very likely none of which would be getting built had they not been supported by heavy government subsidies.
Deutsche Welle 26th July 2016 read more »
Ahead of an expected Final Investment Decision (FID) by EDF’s Board on Thursday (28th July) Stop Hinkley has written to the new Secretary of State for Business, Energy and Industrial Strategy, Greg Clark, to ask him to stamp his own mark on energy policy by ditching proposals for a new nuclear power station at Hinkley Point C. Allan Jeffery said: “If the Company does indeed make a positive Final Investment Decision on Thursday it will be little more than EDF spin. The largely French Government-owned company has a long list of problems to sort out before construction can begin. EDF says there will no concrete poured until at least mid-2019 and this will depend on the start-up of the EPR (the European Pressurised Reactor) at Flamanville, scheduled for the end of 2018 – six years late.”
Stop Hinkley 26th July 2016 read more »
A group of campaigners are calling on the government to ditch the new nuclear power station at Hinkley Point C (HPC) in Somerset. Called ‘Stop Hinkley’, the group has sent a letter to Business, Energy and Industry Strategy Secretary Greg Clark ahead of a final investment decision for the project by EDF’s Board on Thursday. They say a final investment decision for Hinkley would be “little more than spin as problems mount for nuclear delusion”. They believe the nuclear project is too expensive, will kill British manufacturing, is bad for consumers, the taxpayer, business and potentially the environment and is a total waste of money. Renewable energy and energy efficiency projects could be implemented very quickly and much more cheaply, they added.
Energy Live News 26th July 2016 read more »
The board of EDF meets in Paris on Thursday morning to discuss its long-planned investment in a new nuclear power station at Hinkley Point in Somerset, southwest England. There is speculation that the meeting will come to a definitive decision after years of delay. If the outcome is to go ahead, the French company has work to do in rebuilding trust. So what should investors and consumers be looking for? If this is to be a serious commitment by EDF we should at get answers to at least some of the doubts and concerns. First, we should expect to see the publication in full of the expert assessments made of the problems that have bedevilled the two EPR reactors under construction at Olkiluoto in Finland and Flamanville in Northern France. Olkiluoto was originally supposed to come on stream in 2009 and, according to the Finns, the costs of the delay now amount to some €2.6bn. Flamanville will be six years late at least and is already €7.3bn over budget. Trust in the technology has to be restored. Publication of the reports on what went wrong in both cases will demonstrate that lessons are being learnt and that EDF has remembered its commitment to transparency. Second, we should expect to see the contract for Hinkley published in full. This will be another important step in rebuilding trust. Consumers, French and British taxpayers, the company’s employees and investors — including shareholders in EDF, who have seen the company lose more than 60 per cent of its value over the last two years — need to know in detail who will be carrying the risks associated with the project. If construction is delayed, for instance,who pays any extra cost, and who will compensate consumers for the investment required to find alternative power supplies? The French government as the ultimate owner of EDF has seen these details. So has the Chinese government as a major investor. Consumers and non-government shareholders will be pleased to be brought into the circle of knowledge. Third, we should expect to see a detailed explanation of who is funding the construction phase of the project over the next decade. There are numerous estimates of the total cost of the project ranging from £18bn to £37bn but even the lowest figure would make Hinkley the most expensive nuclear station ever built. The sum dwarfs the resources of EDF itself, which has a current market capitalisation of just €21bn Euros. The company’s credit rating has recently been downgraded by Moodys and the outlook remains negative. The risks to the company have already provoked the resignation of the former finance director Thomas Piquemal. Any further French (or UK) government funding would raise more state aid issues in Europe. A proper financing plan is obviously critical to a final investment decision and will help to restore market confidence in the current leadership of EDF. Fourth, we should expect to see a clear and absolute commitment to deliver the project by 2025, as repeatedly promised in recent months by EDF’s leadership in the UK. The UK has to plan its energy supplies and the two reactors at Hinkley are due to provide 7 per cent of total requirements. Any further delay would require alternatives to be found, and soon. One hopes Thursday’s announcement will sweep aside all doubts and we will be able to look forward to cooking our Christmas turkeys in 2025 on Hinkley power. All this, of course, assumes that there really will be a decision on Thursday rather than yet another postponement. The EDF board could decide that there are still too many unresolved problems associated with the EPR and that the risks to the company’s future are too high. As the French proverb has it: Qui mal commence, mal achève.
FT 26th Feb 2016 read more »
As our one-time columnist has departed for Number Ten, we highlight some of the ideas advanced by the man described in today’s papers as the Prime Minister’s ‘political brain’. During Xi’s visit to London, the two governments will sign deals giving Chinese state-owned companies stakes in the British nuclear power stations planned for Hinkley Point in Somerset and Sizewell in Suffolk. It is believed that the deals could lead to the Chinese designing and constructing a third nuclear reactor at Bradwell in Essex. Security experts – reportedly inside as well as outside government – are worried that the Chinese could use their role to build weaknesses into computer systems which will allow them to shut down Britain’s energy production at will. “For those who believe that such an eventuality is unlikely, the Chinese National Nuclear Corporation – one of the state-owned companies involved in the plans for the British nuclear plants – says on its website that it is responsible not just for “increasing the value of state assets and developing the society” but the “building of national defence.” MI5 believes that “the intelligence services of…China…continue to work against UK interests at home and abroad.”” – October 2015 Compromising our security for the sake of trade is a fool’s bargain.
Conservative Home 15th July 2016 read more »
The cost of power from offshore wind turbines is now cheaper than the energy to be generated by the nuclear power plant planned for Hinkley Point in the UK, according to an Energydesk analysis. As French firm EDF prepares to make its final investment decision on the controversial project,Danish renewables company Dong has bid to build windfarms off the Dutch coast for record-breakingly small amounts. The agreed strike price of €72.5/MWh (or roughly £60 at current exchange rates) would would mean an estimated £85/MWh including transmission costs, and no more than £92 taking into account the ‘balancing costs’ to cover for the energy’s intermittency — the government has argued Hinkley offers value because it runs continuously. It’s worth noting that this is far cheaper than the offshore wind projects in the pipeline in the UK, though the upcoming subsidy auction is expected to deliver far better deals than the £110+ contracts agreed in early 2015.
Energydesk 27th July 2016 read more »
Unions members at EDF launched a last ditch attempt to derail plans to build a nuclear power plant in Britain, amid fears over whether the French utility giant’s balance sheet can stomach the £18bn project. It comes as EDF board members prepare to consider the final investment decision for Hinkley Point C at a meeting on Thursday. EDF works council secretary, Jean-Luc Magnaval, told Reuters that it had filed a complaint with a Paris court, and a hearing on the case is due to take place 2 August. “We demand a suspension of the decision,” Magnaval said.
City AM 26th July 2016 read more »