Readers may recall that Centrica foolishly bought into British Energy after EDF acquired it a few years ago, and likewise into EDF's supposed plans to build 4 new nukes in the UK, part of the fleet of 10 (sic) that Huhne wanted to see built. The Telegraph reports that 'Centrica faces big questions' arising from the rather insubstantial Cameron-Sarkozy nuclear deal last week, and they suggest a few:
- what happens if Sarkozy loses to the (anti-nuke) Socialists ?
- does EDF have the necessary credit rating (being essentially an arm of the down-rated French state) ?
- new nukes depend on subsidies; and Huhne's plan was to give 'em a guaranteed inflated electricity price via a combination of feed-in tariffs and contracts-for-difference, but at an as-yet unknown strike price. When is the UK government going to show the dog the rabbit ?
Centrica management, the Telegraph says, "might need to reassure the City that its nuclear ambitions remain on track to create expected returns".
Let's throw in a few more questions, which may be of interest to more than just Centrica and its investors.
- what design is EDF going to settle on, given the nightmares its initial choice (the EPR) is suffering; and when ? If they are going to change the design there will be a lengthy new approval process
- when will EDF be able to say how much guaranteed £££ will be enough to satisfy its endlessly escalating needs ?
- who specifically is going to be the contracting party to these goldmine CFDs etc: the 'Big 6' ? - anyone looked at their balance sheets recently ? The Government ? - illegal (and why would the rest of the EU, now firmly nuke-skeptic or positively anti-nuke, wish to humour France ?)
- why didn't China make a single new nuke project-start in 2011 ?
- just what is going on at Fukushima ?
- how long before it becomes obvious that UK plc just has to get on and build something else to prevent blackouts ?
One could keep this going all night. Seems to me Centrica needs to "reassure the City" that it will be having serious second thoughts.